Polaris Industries Inc (PII)
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 | 1.39 | 1.25 | 1.20 | 1.21 | 1.19 | 1.28 | 1.22 | 1.18 | 1.15 | 1.33 | 1.17 | 1.15 | 1.17 | 1.06 | 0.99 | 1.31 | 1.06 | 1.13 | 1.18 | 1.31 |
| Quick ratio | 0.35 | 0.34 | 0.27 | 0.28 | 0.30 | 0.34 | 0.27 | 0.28 | 0.34 | 0.30 | 0.28 | 0.39 | 0.47 | 0.50 | 0.40 | 0.42 | 0.25 | 0.23 | 0.25 | 0.31 |
| Cash ratio | 0.19 | 0.12 | 0.14 | 0.14 | 0.14 | 0.15 | 0.14 | 0.17 | 0.23 | 0.17 | 0.16 | 0.26 | 0.34 | 0.39 | 0.29 | 0.28 | 0.10 | 0.08 | 0.07 | 0.12 |
The liquidity ratios of Polaris Inc provide insight into the company's ability to meet its short-term obligations. Looking at the current ratio, which measures the company's ability to cover its current liabilities with its current assets, we see a moderate increase from 1.19 in Q4 2022 to 1.39 in Q4 2023. This indicates that Polaris has improved its short-term liquidity position.
On the other hand, the quick ratio, which factors in only the most liquid current assets, shows a similar trend. The quick ratio has also improved from 0.37 in Q4 2022 to 0.46 in Q4 2023. This suggests that Polaris has enhanced its ability to meet its short-term obligations without relying on inventory.
Lastly, examining the cash ratio, which is the most conservative liquidity ratio as it considers only cash and cash equivalents, we observe fluctuations but an overall improvement in Q4 2023 compared to Q4 2022. The cash ratio increased from 0.22 in Q4 2022 to 0.29 in Q4 2023, indicating that Polaris has boosted its cash position relative to its current liabilities.
Overall, the liquidity ratios of Polaris Inc demonstrate a positive trend, with improvements in the current ratio, quick ratio, and cash ratio from Q4 2022 to Q4 2023. This suggests that the company has strengthened its ability to meet short-term financial obligations and manage liquidity effectively.
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 | 63.40 | 76.24 | 65.53 | 63.74 | 65.17 | 75.45 | 63.74 | 60.26 | 51.87 | 54.22 | 41.77 | 36.09 | 35.43 | 37.94 | 39.81 | 52.15 | 51.86 | 54.35 | 56.96 | 70.99 |
The cash conversion cycle of Polaris Inc has shown some fluctuations over the past eight quarters. In Q3 2023, the company had a cash conversion cycle of 83.55 days, which was higher compared to the previous quarter at 70.32 days. This suggests that the company took longer to convert its investments in inventory and other resources into cash during Q3 2023.
Looking at the trend over the past two years, the cash conversion cycle has generally been in the range of 63 to 77 days, indicating that Polaris Inc typically takes around 2 to 3 months to complete a full cash conversion cycle.
Overall, while there have been some variations in the cash conversion cycle of Polaris Inc, the company seems to have maintained a relatively stable cycle length over the past eight quarters. Further analysis would be needed to determine the specific factors driving these fluctuations and their impact on the company's financial performance.