MillerKnoll Inc (MLKN)

The liquidity ratios of MillerKnoll Inc. over the specified periods demonstrate a generally stable and improving trend in short-term financial health.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, increased from 1.50 on May 31, 2022, to 1.67 on May 31, 2023. This indicates an enhanced liquidity position during this period, as the company held 1.67 times its current liabilities in current assets. The ratio remained stable at 1.67 on June 3, 2023, suggesting consistency in short-term asset coverage. There was a slight decrease to 1.53 by May 31, 2024, but the ratio remained above the commonly accepted threshold of 1.0, indicating that the company continued to have sufficient current assets to cover current liabilities, albeit with a marginal decrease.

The quick ratio, which excludes inventory from current assets to focus on the most liquid assets, also improved from 0.71 on May 31, 2022, to 0.84 on May 31, 2023, maintaining at that level on June 3, 2023. This increase reflects an improvement in the company's immediate liquidity position, though it remains below 1.0, implying that current liquid assets alone are insufficient to cover short-term liabilities without inventory. The ratio decreased slightly to 0.80 by May 31, 2024, yet stayed relatively consistent with recent readings.

The cash ratio, measuring the most liquid assets (cash and cash equivalents) in relation to current liabilities, moved upward from 0.27 at May 31, 2022, to 0.32 at May 31, 2023, and remained steady at this level on June 3, 2023. The increase signifies a modest strengthening in cash holdings relative to short-term obligations. By May 31, 2024, the cash ratio increased marginally to 0.33, further indicating a slight improvement in cash liquidity.

In summary, MillerKnoll Inc.’s liquidity ratios depict a consistent and generally positive trend. The current and quick ratios reflect resilience in covering short-term liabilities, with the current ratio comfortably above 1.0, albeit with some recent slight decreases. The cash ratio’s growth indicates a modest strengthening in cash reserves, supporting ongoing liquidity adequacy. Overall, the company’s liquidity position appears stable with an ongoing capacity to meet short-term financial commitments.

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Additional liquidity measure

The analysis of MillerKnoll Inc's cash conversion cycle (CCC) over the specified periods reveals notable fluctuations and a general trend toward shorter cycle durations, with some variability in recent years.

As of May 31, 2022, the company's CCC stood at approximately 67.91 days, indicating that it took roughly 68 days for the company to convert its investments in inventory and receivables into cash, net of its payable period. This duration is relatively moderate within the typical industry ranges, suggesting an average efficiency in managing operating cycles at that time.

By May 31, 2023, the CCC decreased to approximately 62.39 days, reflecting an improvement in cash conversion efficiency, with the company shortening the time it takes to turn inventories and receivables into cash. This reduction signifies efforts that may have been directed toward optimizing inventory turnover or receivables collection practices.

A significant change was observed immediately afterward, on June 3, 2023, when the CCC sharply declined to approximately 36.56 days. Such a drastic reduction could be attributed to changes in operational strategies, supply chain adjustments, or accounting practices that materially affected the components of the cycle—namely, inventory turnover, receivables periods, or payables management. It is also possible that extraordinary events or one-time factors influenced this shorter cycle period.

By May 31, 2024, the CCC increased again to approximately 64.18 days, nearly reverting to the levels observed in May 2022. This indicates a partial reversal of the earlier improvements, potentially reflecting shifts in operational efficiency, changes in customer payment terms, or inventory management practices.

Finally, the data for May 31, 2025, shows a CCC of 0.00 days. This suggests that, at that point, the cycle was effectively eliminated or that the data was not available or not calculated for that period. If accurate, such a figure could indicate that the company had achieved an extremely rapid conversion process, possibly through highly optimized supply chain and receivables management or due to accounting or reporting nuances.

Overall, the company's cash conversion cycle has experienced notable variability over the analyzed periods, with its shortest reported duration in early June 2023 and a subsequent return toward previous levels. These fluctuations may reflect operational adjustments, strategic initiatives, or external market conditions influencing business cycle efficiency.