Inter Parfums Inc (IPAR)

Liquidity ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Current ratio	2.58	2.41	2.41	2.35	2.29	2.85	2.89	2.94	2.90	3.32	3.12	4.03	3.85	4.54	4.78	3.66	3.11	3.24	3.10	3.10
Quick ratio	1.35	1.34	1.28	1.40	1.40	1.63	1.68	1.94	2.00	2.46	2.26	2.93	2.72	2.89	2.69	1.94	2.11	2.19	2.04	2.16
Cash ratio	0.56	0.51	0.55	0.66	0.74	0.71	0.83	1.06	1.31	1.53	1.36	1.93	1.90	1.71	1.91	1.00	1.37	1.14	1.20	1.24

Interpreting the liquidity ratios of Inter Parfums, Inc. provides insight into the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has remained relatively stable over the quarters, ranging from 2.29 to 2.58. A current ratio above 1 indicates that the company has more current assets than current liabilities, with higher values suggesting better liquidity.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Inter Parfums' quick ratio has fluctuated between 1.36 and 2.03, with a similar pattern to the current ratio. A quick ratio above 1 indicates that the company can meet its short-term obligations without relying on the sale of inventory.

The cash ratio, which is the most conservative liquidity measure, focuses solely on the ability to cover short-term liabilities with cash and cash equivalents. Inter Parfums' cash ratio has declined over the quarters from 1.15 to 0.65, indicating a reduction in the cash available to cover immediate obligations.

Overall, Inter Parfums, Inc. has demonstrated strong liquidity levels as indicated by the current and quick ratios consistently above 1. However, the declining trend in the cash ratio warrants attention as it suggests a potential decrease in the company's ability to cover short-term liabilities with cash alone. It is essential for the company to closely monitor its cash position to ensure it can meet its financial obligations in the short term.

Additional liquidity measure

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash conversion cycle	days	154.31	173.09	166.43	167.71	149.74	165.14	150.05	151.75	122.66	141.05	153.60	163.62	174.56	198.17	155.00	141.81	130.98	157.00	151.65	148.41

Inter Parfums, Inc.'s cash conversion cycle has shown some fluctuation over the past eight quarters. The cash conversion cycle measures how long it takes for a company to convert its investment in inventory and other resources into cash flow from sales.

In Q4 2023, the company's cash conversion cycle stood at 279.93 days, showing an improvement from the previous quarter's 298.59 days. However, this still represents a longer cash conversion cycle compared to the same quarter in the previous year, where it was 263.69 days.

Looking at the trend over the past two years, there seems to be a general increase in the cash conversion cycle, with peaks observed in the second and third quarters of 2023 at 299.48 and 288.91 days, respectively. This suggests that the company may be taking longer to convert its investments into cash during these periods.

Conversely, in the first quarters of the years 2022 and 2023, Inter Parfums, Inc. managed to reduce its cash conversion cycle, indicating more efficiency in managing its working capital and generating cash from its operations.

Overall, the company should focus on optimizing its cash conversion cycle by potentially improving inventory management, speeding up receivables collection, and efficiently managing payables to enhance liquidity and operational efficiency.