Kontoor Brands Inc (KTB)

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
Current ratio 2.66 2.65 2.60 2.59 2.23 2.12 2.06 2.01 2.00 1.96 2.08 2.02 2.18 2.21 2.78 3.44 2.32 2.47 2.49
Quick ratio 1.10 0.81 0.69 0.13 0.65 0.58 0.71 0.96 1.04 0.96 0.93 1.04 1.16 1.10 1.24 2.05 1.04 0.88 0.87
Cash ratio 0.55 0.20 0.21 0.13 0.13 0.11 0.31 0.39 0.41 0.43 0.42 0.53 0.60 0.62 0.77 1.47 0.44 0.10 0.20

Kontoor Brands Inc's liquidity ratios have shown fluctuating trends over the past few quarters. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has generally been above 2, indicating a healthy liquidity position. However, there was a significant increase in the current ratio in the March 2020 quarter, suggesting a temporary improvement in liquidity at that time.

The quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, has been lower than the current ratio and has exhibited more volatility. The quick ratio fell sharply in the March 2023 quarter, indicating a decrease in the company's ability to cover its short-term obligations with its most liquid assets.

The cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) relative to current liabilities, has also varied significantly. There was a notable spike in the cash ratio in the June 2020 quarter, which suggests a temporary increase in the company's cash reserves compared to its short-term obligations.

Overall, while Kontoor Brands Inc generally maintains a solid current ratio above 2, the fluctuating trends in the quick and cash ratios indicate varying levels of liquidity and the need for close monitoring of the company's ability to meet short-term financial obligations.

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
Cash conversion cycle days 86.06 104.16 99.93 86.31 93.92 93.90 67.25 68.30 68.19 67.31 67.94 63.58 71.84 80.52 83.50 87.45

The cash conversion cycle is a crucial indicator of how efficiently a company manages its working capital. It measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Based on the data provided for Kontoor Brands Inc, we observe fluctuations in the cash conversion cycle over the quarters. The trend indicates that the company has experienced some variability in its efficiency in managing cash flows and working capital.

In the most recent quarter, at December 31, 2023, the cash conversion cycle was 86.06 days, which is slightly lower compared to the previous quarter at September 30, 2023, where it was 104.16 days. This decrease in the cycle suggests that the company was able to improve its efficiency in converting its resources into cash during this period.

Looking back over a few quarters, there seems to be some seasonality in the cash conversion cycle, with fluctuations occurring periodically. The company experienced a peak in the cycle at September 30, 2022, at 93.90 days, followed by a significant improvement in efficiency in the subsequent quarter at June 30, 2022, where the cycle decreased to 67.25 days.

Overall, by monitoring and analyzing the cash conversion cycle, investors and stakeholders can gain insights into the company's operational efficiency, liquidity management, and potential cash flow challenges. It is essential for Kontoor Brands Inc to focus on optimizing its working capital management to ensure smooth operations and sustainable growth in the long term.