Patterson Companies Inc (PDCO)
Liquidity ratios
| Apr 27, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | Apr 24, 2021 | Jan 23, 2021 | Oct 24, 2020 | Jul 25, 2020 | Apr 25, 2020 | Jan 25, 2020 | Oct 26, 2019 | Jul 27, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.33 | 1.43 | 1.56 | 1.63 | 1.64 | 1.57 | 1.60 | 1.63 | 1.65 | 1.58 | 1.51 | 1.51 | 1.48 | 1.43 | 1.54 | 1.49 | 1.44 | 1.41 | 1.59 | 1.81 |
| Quick ratio | 0.50 | 0.48 | 0.53 | 0.48 | 0.59 | 0.49 | 0.53 | 0.50 | 0.58 | 0.56 | 0.53 | 0.48 | 0.54 | 0.51 | 0.59 | 0.50 | 0.46 | 0.46 | 0.67 | 0.70 |
| Cash ratio | 0.09 | 0.10 | 0.11 | 0.11 | 0.15 | 0.13 | 0.13 | 0.15 | 0.14 | 0.15 | 0.13 | 0.13 | 0.13 | 0.13 | 0.13 | 0.12 | 0.07 | 0.09 | 0.12 | 0.13 |
Patterson Companies Inc's liquidity ratios have shown some fluctuations over the past several quarters. The current ratio, measuring the company's ability to pay its short-term obligations with its current assets, has been relatively stable, ranging from 1.33 to 1.65. This indicates that Patterson has a sound ability to cover its current liabilities with its current assets, although the ratio has slightly decreased in recent quarters.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has varied between 0.46 and 0.70. This suggests that Patterson may have some difficulty meeting its immediate obligations using only its most liquid assets, especially in quarters where the ratio was below 0.5. However, the company's quick ratio has shown improvement in some periods, indicating better liquidity management.
The cash ratio, focusing solely on the most liquid assets like cash and cash equivalents to cover current liabilities, has ranged from 0.07 to 0.15. This ratio has generally been on the lower side, indicating that Patterson may have a relatively lower level of cash on hand compared to its current liabilities. However, the company has maintained a consistent cash ratio over the quarters, suggesting a stable liquidity position in terms of immediate cash availability.
Overall, while Patterson Companies Inc has a solid current ratio, showing the ability to meet short-term obligations, its quick ratio and cash ratio indicate that the company may need to further optimize its liquidity position by increasing its liquid assets relative to its current liabilities.
Additional liquidity measure
| Apr 27, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | Apr 24, 2021 | Jan 23, 2021 | Oct 24, 2020 | Jul 25, 2020 | Apr 25, 2020 | Jan 25, 2020 | Oct 26, 2019 | Jul 27, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 33.05 | 42.43 | 39.30 | 36.73 | 31.94 | 41.23 | 37.73 | 36.83 | 32.42 | 37.35 | 31.62 | 34.51 | 37.62 | 42.76 | 38.34 | 38.10 | 23.45 | 34.46 | 39.76 | 48.34 |
The cash conversion cycle measures how long it takes for a company to convert its investment in inventory into cash flow from sales. It is calculated as the sum of the days inventory outstanding (DIO), days sales outstanding (DSO), and days payables outstanding (DPO).
For Patterson Companies Inc, the cash conversion cycle has fluctuated over the periods provided, ranging from a low of 23.45 days to a high of 48.34 days. A shorter cash conversion cycle indicates the company is efficiently managing its working capital, while a longer cycle suggests inefficiencies in managing inventory, sales, or payments.
Analyzing the trend, it is observed that the cash conversion cycle generally improved from early 2020 to mid-2022, reaching a low point in July 2020. However, there was an increase in the cycle length after that period, with some cycles exceeding 40 days. This may indicate challenges in managing inventory levels and collecting payments promptly.
Overall, Patterson Companies Inc should aim to reduce its cash conversion cycle to improve liquidity and operational efficiency. This could involve optimizing inventory management, streamlining sales processes, and negotiating favorable payment terms with suppliers. Regular monitoring and analysis of the cash conversion cycle can help identify areas for improvement and drive better working capital management.