Planet Fitness Inc (PLNT)
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 | 2.08 | 1.94 | 1.81 | 2.11 | 1.88 | 1.98 | 1.84 | 2.35 | 2.27 | 2.09 | 1.99 | 1.89 | 3.75 | 3.93 | 4.30 | 4.83 | 5.07 | 4.66 | 4.32 | 3.69 |
| Quick ratio | 1.78 | 1.62 | 2.09 | 2.41 | 2.13 | 2.18 | 1.97 | 1.96 | 1.95 | 1.77 | 1.63 | 1.56 | 3.34 | 3.68 | 3.97 | 4.30 | 4.27 | 3.84 | 3.42 | 3.21 |
| Cash ratio | 1.44 | 1.42 | 1.88 | 2.25 | 1.91 | 2.00 | 1.75 | 1.84 | 1.68 | 1.57 | 1.46 | 1.45 | 3.09 | 3.52 | 3.73 | 4.09 | 3.93 | 3.49 | 3.15 | 3.04 |
Planet Fitness Inc's liquidity ratios indicate the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, shows a general decreasing trend from early 2020 to late 2024, with a peak at 5.07 in December 2020 and a low at 1.81 in June 2024. Although the current ratio has fluctuated, it remained above 1, which generally indicates a healthy liquidity position.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, follows a similar trend to the current ratio, peaking at 4.30 in March 2021 and hitting a low of 1.62 in September 2024. The quick ratio also generally stayed above 1, indicating the company's ability to meet its short-term obligations without relying on selling inventory.
The cash ratio, which provides the most conservative estimate of liquidity by considering only cash and cash equivalents, experienced fluctuations over the years. From a high of 4.09 in March 2021 to a low of 1.42 in September 2024, the cash ratio demonstrates the company's ability to cover its current liabilities with available cash on hand.
Overall, while there have been fluctuations in Planet Fitness Inc's liquidity ratios over time, the company generally maintained a healthy liquidity position, with current, quick, and cash ratios mostly above 1, which suggests that the company has the ability to meet its short-term obligations comfortably.
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 | -19.15 | -37.41 | -29.35 | -16.41 | -15.88 | -18.06 | -17.81 | -12.79 | -2.99 | 4.48 | 1.31 | -7.25 | -5.98 | -12.45 | -5.09 | -0.76 | 5.08 | -24.12 | 4.93 | -51.70 |
Planet Fitness Inc's cash conversion cycle measures the number of days it takes for the company to convert its investments in raw materials and other resources into cash from sales. A negative cash conversion cycle indicates that Planet Fitness is efficiently managing its working capital.
From March 31, 2020, to December 31, 2024, Planet Fitness experienced fluctuations in its cash conversion cycle. The cycle remained generally negative throughout this period, indicating that the company was able to collect cash from customers before paying its suppliers. This efficient management of working capital is favorable, as it allows the company to generate cash quickly and reinvest it back into the business or reduce debt.
There are periods where the cash conversion cycle fluctuated, showing some variations in the efficiency of managing working capital. However, despite these fluctuations, the overall trend indicates that Planet Fitness has been able to effectively manage its cash conversion cycle over the analyzed period. This efficiency can help the company maintain financial stability and support future growth initiatives.