Oxford Industries Inc (OXM)

Oxford Industries Inc has seen fluctuations in its liquidity ratios over the past five years.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, has shown some variability. The ratio was relatively low at 1.22 in 2024, compared to a high of 1.77 in 2022. This indicates that the company may have fewer current assets relative to its current liabilities in 2024, which could potentially impact its short-term financial flexibility.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Oxford Industries Inc's quick ratio has shown significant fluctuations, ranging from a low of 0.27 in 2023 to a high of 1.17 in 2022. A quick ratio below 1 indicates that the company may have difficulty meeting its short-term obligations without relying on inventory sales.

The cash ratio, which is the most conservative liquidity measure, assesses the company's ability to cover its short-term obligations with its most liquid asset, cash. Oxford Industries Inc's cash ratio has been consistently low over the years, with the ratio at 0.03 in both 2024 and 2023. This suggests that the company has a very low level of cash reserves relative to its current liabilities, which may raise concerns about its ability to meet immediate payment obligations.

Overall, Oxford Industries Inc's liquidity ratios indicate some variability and potential challenges in terms of its short-term financial stability. Investors and analysts may want to closely monitor these ratios to assess the company's liquidity position and financial health.

---

Additional liquidity measure

The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources back into cash flow from sales. In the case of Oxford Industries Inc, the trend over the past five years shows fluctuations in the cash conversion cycle:

- In February 2024, the cash conversion cycle decreased significantly to 36.91 days compared to 53.74 days in January 2023, indicating improved efficiency in managing inventory, accounts receivable, and accounts payable.
- The cycle was longer in January 2023, but it had declined from 44.66 days in January 2021, showing some level of improvement from the previous year.
- In January 2021, there was a shorter cash conversion cycle of 44.66 days compared to 49.33 days in February 2020, although it was still longer than in 2020. This suggests a change in the company's working capital management.
- In February 2020, the cash conversion cycle was 49.33 days, indicating a longer cycle compared to the previous year, which could be a result of inefficiencies in managing inventory and collections.

Overall, Oxford Industries Inc has experienced fluctuations in its cash conversion cycle over the past five years, with some improvements in efficiency observed in recent periods. Analyzing the components of the cash conversion cycle, such as inventory turnover, accounts receivable days, and accounts payable days, could provide further insights into the company's working capital management strategies.