ODP Corp (ODP)

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 0.93 0.92 0.90 0.94 0.99 1.00 0.98 0.98 1.03 1.11 1.06 1.04 1.05 1.32 1.15 1.15 1.13 1.08 1.18 1.15
Quick ratio 0.11 0.11 0.11 0.17 0.23 0.22 0.19 0.19 0.22 0.25 0.22 0.28 0.23 0.35 0.33 0.35 0.35 0.32 0.36 0.36
Cash ratio 0.11 0.11 0.11 0.17 0.23 0.22 0.19 0.19 0.22 0.25 0.22 0.28 0.23 0.35 0.33 0.35 0.35 0.32 0.36 0.36

From a liquidity perspective, ODP Corp's current ratio has generally remained above 1 over the past few years, indicating that the company has had sufficient current assets to cover its current liabilities. However, there has been a slight decline in the current ratio from 1.32 in September 2021 to 0.93 in December 2024, which may suggest a potential liquidity strain.

In terms of the quick ratio, which excludes inventory from current assets, ODP Corp has shown a decreasing trend over the years. The quick ratio decreased from 0.35 in March 2021 to 0.11 in December 2024, indicating a decrease in the company's ability to meet its short-term obligations with its most liquid assets.

The cash ratio, which is the most stringent measure of liquidity as it considers only cash and cash equivalents, has also shown a declining trend for ODP Corp. The cash ratio decreased from 0.35 in March 2021 to 0.11 in December 2024, raising concerns about the company's ability to cover its immediate liabilities with cash on hand.

Overall, the declining trends in the quick ratio and cash ratio, as well as the slight decrease in the current ratio, suggest that ODP Corp may be facing challenges in maintaining its liquidity position in the short term. It would be advisable for the company to closely monitor its liquidity levels and take appropriate measures to ensure it can meet its financial obligations as they come due.

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 50.69 48.99 49.12 45.35 46.04 45.20 47.19 44.02 45.49 49.27 53.68 46.53 45.24 43.16 47.29 46.36 44.79 47.26 46.49 41.60

The cash conversion cycle of ODP Corp has fluctuated over the periods provided in the data. The cash conversion cycle is a measure of how long it takes for a company to convert its investment in inventory and other resources into cash flows from sales.

From the data, we observe that the cash conversion cycle ranged from a low of 41.60 days to a high of 53.68 days during the period. Generally, a shorter cash conversion cycle indicates that the company is able to efficiently manage its working capital and generate cash from its operating activities more quickly.

ODP Corp's cash conversion cycle showed some volatility, with periods of both shorter and longer cycles. It is essential for the company to closely monitor and manage its inventory turnover, accounts payable, and accounts receivable to minimize the time it takes to convert its resources into cash.

Analyzing the trends in the cash conversion cycle can provide insights into the efficiency of ODP Corp's operations and its ability to manage working capital effectively. A downward trend in the cash conversion cycle would generally be viewed positively, as it indicates improvements in efficiency and liquidity management within the company.