O’Reilly Automotive Inc (ORLY)
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 | 0.71 | 0.70 | 0.70 | 0.71 | 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 |
| Quick ratio | 0.02 | 0.01 | 0.02 | 0.01 | 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 |
| Cash ratio | 0.02 | 0.01 | 0.02 | 0.01 | 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 |
O’Reilly Automotive Inc's liquidity ratios show a mixed trend over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been declining from 0.91 on March 31, 2020, to 0.71 on December 31, 2024. This downward trend indicates a weakening ability to meet short-term obligations.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also shows a downward trend from 0.06 on March 31, 2020, to 0.02 on December 31, 2024. This suggests that the company may struggle to meet its short-term obligations without relying on inventory.
The cash ratio, which is the most conservative measure of liquidity, paints a similar picture with a decline from 0.06 on March 31, 2020, to 0.02 on December 31, 2024. This indicates that O’Reilly Automotive Inc may have limited cash resources to cover its immediate liabilities.
Overall, the declining trend in all three liquidity ratios suggests that O’Reilly Automotive Inc's liquidity position has weakened over the years, and the company may face challenges in meeting its short-term obligations without proper management of its working capital and cash flows.
See also:
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 | 228.11 | 223.50 | 219.76 | 223.94 | 220.61 | 221.46 | 226.54 | 228.52 | 226.39 | 222.29 | 221.77 | 217.79 | 213.32 | 217.96 | 222.88 | 228.41 | 241.61 | 241.99 | 255.68 | 270.20 |
The cash conversion cycle (CCC) is a financial metric that measures how long it takes for a company to convert its resources invested in inventory and other inputs into cash inflows from sales. For O’Reilly Automotive Inc, the trend in the CCC over the period from March 31, 2020, to December 31, 2024, shows fluctuations but overall indicates an efficient management of working capital.
The CCC decreased from 270.20 days on March 31, 2020, to 213.32 days on December 31, 2021, which suggests that the company was able to reduce the time it takes to convert its investments into cash flows during this period. However, there was a slight increase to 228.52 days by March 31, 2023, before decreasing again to 220.61 days by December 31, 2023, and then to 219.76 days by June 30, 2024.
Overall, the company seems to be effectively managing its inventory, accounts receivable, and accounts payable to shorten the cash conversion cycle, indicating efficient working capital management practices. Despite some fluctuations, the decreasing trend in the CCC over the years demonstrates O’Reilly Automotive Inc’s ability to optimize its operational processes and enhance liquidity by converting investments into cash more quickly.