Planet Fitness Inc (PLNT)
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 | 1.88 | 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 | 3.71 | 2.25 | 3.38 | 3.10 |
| Quick ratio | 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 | 3.36 | 1.90 | 2.95 | 2.71 |
| Cash ratio | 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 | 3.00 | 1.62 | 2.64 | 2.50 |
Planet Fitness Inc's liquidity ratios show a consistent trend of strong liquidity position over the past eight quarters with both the current ratio and quick ratio consistently above 1.5.
The current ratio, which indicates the company's ability to cover its short-term obligations with its current assets, has remained relatively stable in the range of 1.84 to 2.35. This suggests that Planet Fitness has had sufficient current assets to meet its current liabilities throughout the periods analyzed.
The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, has also been strong, ranging from 1.59 to 2.08. This indicates that even without considering inventory, Planet Fitness has enough liquid assets to cover its short-term liabilities comfortably.
The cash ratio, which specifically measures the company's ability to cover its short-term obligations with cash and cash equivalents, has also shown a stable and healthy trend, ranging from 1.37 to 1.96. This suggests that Planet Fitness has a strong ability to meet its short-term obligations using its cash resources.
Overall, based on the consistent and strong liquidity ratios, it can be concluded that Planet Fitness Inc has maintained a solid liquidity position over the past eight quarters, indicating its ability to meet its short-term financial obligations 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 | -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 | -8.81 | -15.43 | -2.70 | -23.64 |
The cash conversion cycle of Planet Fitness Inc has fluctuated over the past eight quarters. In Q4 2023, the company's cash conversion cycle was -17.54 days, indicating that it took approximately 17.54 days to convert its investments in inventory and other resources into cash from sales. This was an improvement from the previous quarter where the cycle was -19.51 days.
The negative values indicate that the company is efficiently managing its working capital, resulting in a quick turnover of cash. In Q1 2023, the cycle was at its lowest point at -13.81 days, reflecting an even faster conversion of resources into cash.
Comparing to previous years, the cash conversion cycle has shown significant improvements since Q2 2022 when it was at its highest point at -50.92 days. This suggests that the company has become more efficient in managing its operations and converting its assets into cash over time.
Overall, a negative cash conversion cycle indicates that Planet Fitness Inc is effectively managing its working capital and generating cash quickly from its operational activities, which is a positive sign for its financial health and performance.