O’Reilly Automotive Inc (ORLY)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.73 | 0.69 | 0.69 | 0.71 | 0.71 | 0.70 | 0.75 | 0.73 | 0.77 | 0.76 | 0.82 | 0.79 | 0.86 | 0.98 | 0.95 | 0.91 | 0.86 | 0.81 | 0.85 | 0.84 |
| Quick ratio | 0.10 | 0.08 | 0.07 | 0.07 | 0.08 | 0.08 | 0.11 | 0.10 | 0.13 | 0.14 | 0.18 | 0.17 | 0.15 | 0.35 | 0.24 | 0.13 | 0.08 | 0.07 | 0.09 | 0.09 |
| Cash ratio | 0.04 | 0.01 | 0.01 | 0.01 | 0.02 | 0.01 | 0.04 | 0.03 | 0.06 | 0.08 | 0.11 | 0.10 | 0.09 | 0.29 | 0.17 | 0.06 | 0.01 | 0.01 | 0.01 | 0.01 |
Based on the liquidity ratios provided for O`Reilly Automotive, Inc., the company's liquidity position appears to have fluctuated over the past eight quarters.
The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has shown a downward trend from Q1 2022 to Q4 2023. The current ratio fluctuated between 0.69 and 0.75 during this period, indicating that the company may have had difficulty meeting its short-term liabilities in some quarters.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibited a decreasing trend over the quarters, ranging from 0.09 to 0.12. This suggests that the company's ability to meet its immediate obligations using its most liquid assets has been relatively weak.
The cash ratio, which measures the company's ability to cover its short-term liabilities with its cash and cash equivalents, has also shown a slightly declining pattern from Q1 2022 to Q4 2023. The cash ratio varied between 0.02 and 0.05, indicating that O`Reilly Automotive may have had limited cash resources to meet its short-term financial obligations.
Overall, O`Reilly Automotive's liquidity ratios imply that the company may have faced challenges in maintaining a strong liquidity position during the analyzed period. Management should closely monitor and manage the company's liquidity to ensure it can meet its short-term financial commitments effectively.
See also:
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -29.41 | -32.73 | -35.35 | -34.86 | -36.42 | -34.72 | -29.99 | -26.60 | -24.65 | -23.49 | -23.37 | -15.16 | -10.58 | -11.80 | -5.98 | 2.16 | 4.05 | -0.55 | 1.15 | 2.33 |
The cash conversion cycle for O`Reilly Automotive, Inc. has shown variability over the past eight quarters. The company's cash conversion cycle, a metric that reflects the time it takes to convert inventory into cash from sales, has generally been negative in recent quarters. A negative cash conversion cycle indicates that the company is able to collect cash from sales before having to pay its suppliers for inventory, which is a favorable position.
The cash conversion cycle ranged from a low of -65.71 days in Q2 2023 to a high of -51.24 days in Q1 2022. This negative trend suggests that O`Reilly Automotive, Inc. efficiently manages its working capital by quickly converting inventory into sales and collecting cash from customers. The shorter the cash conversion cycle, the more efficient the company is in managing its cash flow and working capital.
Overall, the consistent negative cash conversion cycle over the quarters indicates that O`Reilly Automotive, Inc. has been effective in managing its operations to generate sales revenue, collect cash from customers, and settle payables to suppliers in a timely manner. This efficiency in working capital management can contribute to the company's financial health and profitability.