Prestige Brand Holdings Inc (PBH)

Prestige Brand Holdings Inc's liquidity ratios have shown a positive trend over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with current assets, has consistently been above 2, indicating a healthy liquidity position. The ratio increased from 2.21 in March 31, 2021, to 4.20 in March 31, 2025, showing a significant improvement in the company's liquidity.

Similarly, the quick ratio, also known as the acid-test ratio, measures the firm's ability to meet its short-term liabilities with its most liquid assets. This ratio has also exhibited a positive trend, increasing steadily from 1.20 in March 31, 2021, to 2.74 in March 31, 2025. This suggests that Prestige Brand Holdings Inc has a strong ability to cover its short-term obligations without relying on inventory.

Lastly, the cash ratio, which indicates the proportion of a company's current assets held in cash to cover its current liabilities, has shown a notable improvement over the years. The ratio rose from 0.26 in March 31, 2021, to 0.92 in March 31, 2025, indicating that the company has been able to build up its cash reserves relative to its short-term obligations.

Overall, the liquidity ratios of Prestige Brand Holdings Inc demonstrate a robust financial position with improving liquidity and the ability to meet its short-term obligations comfortably.

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Additional liquidity measure

Prestige Brand Holdings Inc's cash conversion cycle has shown fluctuations over the past five years. As of March 31, 2021, the company's cash conversion cycle was 107.97 days, indicating that it took Prestige approximately 108 days to convert its investments in inventory and other resources back into cash.

By March 31, 2022, the cash conversion cycle had improved to 97.36 days, suggesting that Prestige was more efficient in managing its working capital and converting its assets into cash within a shorter timeframe.

However, in the following years, the trend reversed. By March 31, 2023, the cash conversion cycle increased significantly to 126.25 days, reflecting a potential delay in Prestige's cash conversion activities. This trend persisted, with the cash conversion cycle growing to 130.01 days by March 31, 2024, and further escalating to 155.73 days by March 31, 2025.

The prolonged cash conversion cycle observed in the latter years could indicate challenges in managing inventory, collecting receivables, or negotiating payment terms with suppliers. Investors and stakeholders should monitor these trends closely, as a lengthening cash conversion cycle may impact liquidity and overall financial performance.