LCI Industries (LCII)

The liquidity ratios of LCI Industries indicate the company's ability to meet its short-term obligations with its current assets. The current ratio has varied over the years, ranging from 2.09 to 3.30, with the latest figure at 2.83 as of December 31, 2023. This ratio suggests that the company is able to cover its current liabilities comfortably with its current assets.

The quick ratio, which excludes inventory from current assets, has generally been below 1, indicating that LCI Industries may have some difficulty meeting its short-term obligations without relying on inventory. The quick ratio has hovered around 0.86 to 1.02 in recent years, with the latest figure at 0.88 as of December 31, 2023.

Furthermore, the cash ratio, which provides the most stringent test of liquidity as it only considers cash and cash equivalents, has also fluctuated over the years, falling between 0.24 and 0.35. As of December 31, 2023, the cash ratio stands at 0.34, indicating that while the company has improved its cash position compared to the previous year, it may still face challenges in meeting its short-term obligations solely with cash on hand.

Overall, the liquidity ratios of LCI Industries show a mix of strengths and areas for improvement. The current ratio reflects a healthy liquidity position, while the quick and cash ratios suggest the company may need to manage its cash and quick assets more efficiently to enhance its short-term liquidity position.

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Additional liquidity measure

The cash conversion cycle of LCI Industries has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle improved to 91.64 days from 97.24 days in 2022. This indicates that the company was able to convert its investments in inventory into cash more efficiently in 2023. However, compared to 2021, where the cash conversion cycle was 112.70 days, the company has significantly improved its working capital management.

It is worth noting that in 2020 and 2019, the cash conversion cycle was relatively stable at 89.02 days and 89.41 days respectively. These consistent levels suggest that the company has been successful in managing its cash flow and working capital efficiency over these years.

Overall, the trend in the cash conversion cycle of LCI Industries shows a positive improvement in operational efficiency and working capital management, particularly in the most recent year. Continued focus on optimizing inventory turnover, accounts receivable collection, and accounts payable management could further enhance the company's cash conversion cycle in the future.