M/I Homes Inc (MHO)

The liquidity ratios of MI Homes Inc. exhibit a positive trend over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has steadily increased from 4.35 in 2020 to 6.62 in 2023. This indicates that MI Homes Inc. has a stronger liquidity position and improved ability to meet its short-term liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. MI Homes Inc.'s quick ratio has fluctuated over the years but overall shows an increasing trend, reaching 1.63 in 2023 from 0.48 in 2019. This suggests that the company has enhanced its ability to meet short-term obligations without relying on inventory.

The cash ratio, which is the most conservative liquidity ratio as it considers only cash and cash equivalents to current liabilities, has mirrored the trend of the quick ratio. The cash ratio for MI Homes Inc. has increased consistently from 0.48 in 2019 to 1.63 in 2023. This signifies an improved ability to cover short-term liabilities with highly liquid assets.

Overall, the liquidity ratios of MI Homes Inc. demonstrate a positive liquidity position, with increasing current, quick, and cash ratios over the past five years. This indicates that the company has strengthened its ability to meet its short-term obligations and suggests a healthy financial position in terms of liquidity management.

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Additional liquidity measure

Based on the data provided for MI Homes Inc., the cash conversion cycle for the past five years has consistently been reported as 0.00 days. This indicates that the company has been effectively managing its cash flows and operational efficiency in terms of converting its investments in inventory and accounts receivable into cash without incurring significant delays. A cash conversion cycle of 0.00 days suggests that the company is able to quickly and efficiently convert its resources into cash, reflecting strong working capital management practices. This consistent performance over the years is a positive indication of MI Homes Inc.'s ability to efficiently manage its operating cycle and maintain a healthy cash position.