Pool Corporation (POOL)

Pool Corporation's liquidity ratios, as indicated by the current ratio, have shown a generally positive trend over the past few years, increasing from 1.90 in March 2020 to 2.05 in December 2024. This indicates that the company's current assets are consistently higher than its current liabilities, reflecting a strong ability to meet short-term obligations.

The quick ratio, which measures the company's ability to meet immediate short-term obligations with its most liquid assets, has also shown improvement over the years, fluctuating but generally staying above 0.1. This suggests that Pool Corporation has a stable level of liquidity to cover its short-term liabilities without relying heavily on inventory.

The cash ratio, which provides a more stringent measure of liquidity by considering only cash and cash equivalents, has also demonstrated consistency, staying at around 0.1 throughout the period. This indicates that the company maintains a sufficient level of cash on hand to meet its short-term obligations, providing a strong buffer against any unexpected cash flow challenges.

Overall, Pool Corporation's liquidity ratios paint a positive picture of the company's financial health, with adequate levels of liquid assets to support its short-term obligations and operational needs.

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Additional liquidity measure

The cash conversion cycle for Pool Corporation has fluctuated over the past few years, indicating changes in the efficiency of its cash management. The cash conversion cycle represents the time it takes for the company to convert its investment in inventory into cash from sales.

Starting from March 31, 2020, the cash conversion cycle was at 133.90 days, reflecting a relatively lengthy period. However, by September 30, 2020, this cycle had improved to 85.19 days, indicating a better management of inventory and receivables.

Subsequently, there were fluctuations in the cash conversion cycle, with peaks and troughs observed in the following quarters. The cycle increased to 154.21 days by March 31, 2022, which suggests that Pool Corporation may have been experiencing challenges with efficiently converting its investments into cash during that period.

As of December 31, 2024, the cash conversion cycle stood at 125.98 days, showing some improvement compared to the peak in 2022. Pool Corporation should continue to focus on effectively managing its inventory, payables, and receivables to optimize its cash conversion cycle and enhance its overall financial performance.