Callaway Golf Company (MODG)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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 1.94 1.93 1.93 1.82 1.72 1.76 1.78 1.63 1.29 1.31 1.29 1.21 1.35 1.59 1.59 1.73 2.33 2.49 2.45 1.44
Quick ratio 0.77 0.89 0.86 0.77 0.64 0.70 0.65 0.60 0.31 0.47 0.54 0.58 0.55 0.91 0.94 1.05 1.29 1.74 1.15 0.69
Cash ratio 0.54 0.52 0.37 0.27 0.42 0.36 0.21 0.17 0.16 0.20 0.17 0.21 0.41 0.60 0.53 0.58 0.94 1.07 0.48 0.26

The current ratio for Callaway Golf Company has shown fluctuations over the years, ranging from a low of 1.21 as of March 31, 2022, to a high of 2.49 as of September 30, 2020. This indicates the company's ability to cover its short-term liabilities with its current assets. Generally, a current ratio above 1 is considered healthy, but a ratio that is too high may suggest inefficient use of assets.

The quick ratio, which excludes inventory from current assets, provides a more stringent measure of liquidity. Callaway Golf Company's quick ratio also fluctuates, with a low of 0.31 as of December 31, 2022, and a high of 1.74 as of September 30, 2020. 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 focuses solely on cash and cash equivalents, reflects the company's ability to pay off current liabilities immediately. Callaway Golf Company's cash ratio ranges from 0.16 as of December 31, 2022, to 1.07 as of September 30, 2020. A higher cash ratio suggests a stronger ability to meet short-term obligations without relying on other current assets.

Overall, the liquidity ratios for Callaway Golf Company show varying levels of liquidity over time, with fluctuations that may indicate changing liquidity positions. It is essential for the company to maintain a balance between current assets and liabilities to ensure it can meet its short-term financial obligations effectively.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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 127.31 207.45 213.34 225.20 235.45 234.88 270.97 280.35 295.33 228.52 194.62 190.07 179.05 119.82 114.05 115.50 92.61 130.86 142.76 160.54

The cash conversion cycle of Callaway Golf Company has shown fluctuations over the years. In general, the cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.

From March 31, 2020, to December 31, 2024, Callaway Golf's cash conversion cycle varied significantly. It started at 160.54 days in March 2020 and decreased to the lowest point of 92.61 days by December 2020. This suggests the company was able to efficiently manage its cash flow and working capital during this period.

However, from March 2021 onwards, the cash conversion cycle began to increase again, reaching a peak of 295.33 days by December 2022. This indicates potential issues with managing inventory levels, collections from customers, and payment to suppliers, which could impact the company's liquidity and operational efficiency.

In the following quarters, there was a slight improvement in the cash conversion cycle, with a decrease to 127.31 days by December 2024. It is important for Callaway Golf to monitor and optimize its cash conversion cycle to ensure it remains efficient and effective in managing its working capital and cash flows. A shorter cash conversion cycle generally indicates better liquidity and operational performance.