PriceSmart Inc (PSMT)
Liquidity ratios
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.20 | 1.25 | 1.38 | 1.44 | 1.43 | 1.40 | 1.34 | 1.30 | 1.32 | 1.32 | 1.31 | 1.32 | 1.29 | 1.27 | 1.23 | 1.23 | 1.25 | 1.22 | 1.21 | 1.28 |
| Quick ratio | 0.40 | 0.40 | 0.55 | 0.60 | 0.57 | 0.48 | 0.45 | 0.42 | 0.39 | 0.39 | 0.50 | 0.56 | 0.55 | 0.53 | 0.63 | 0.63 | 0.41 | 0.31 | 0.32 | 0.34 |
| Cash ratio | 0.37 | 0.37 | 0.52 | 0.57 | 0.54 | 0.45 | 0.43 | 0.39 | 0.37 | 0.36 | 0.47 | 0.53 | 0.52 | 0.50 | 0.61 | 0.61 | 0.39 | 0.29 | 0.29 | 0.32 |
PriceSmart Inc's liquidity ratios have shown some fluctuations over the past few quarters. The current ratio, which measures the company's ability to cover its short-term obligations with its short-term assets, has generally been above 1, indicating a healthy liquidity position. However, there has been some slight variability in the ratio, with a peak of 1.44 in May 2023 and a low of 1.20 in February 2024.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also exhibited fluctuations. The ratio has ranged from a low of 0.39 to a high of 0.63 over the period under review. This suggests that PriceSmart Inc may have some difficulty meeting its short-term obligations without relying on inventory in certain quarters.
The cash ratio, which indicates the proportion of a company's current assets held in cash or cash equivalents, has varied as well. The ratio has ranged from 0.29 to 0.61, indicating that PriceSmart Inc has maintained a solid level of cash reserves relative to its current liabilities.
Overall, while PriceSmart Inc's liquidity ratios have experienced some fluctuations, the company generally maintains a satisfactory liquidity position. It is important for investors and stakeholders to continue monitoring these ratios to assess the company's ability to meet its short-term obligations.
Additional liquidity measure
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -1.39 | 6.04 | 13.22 | 18.13 | 30.35 | 46.21 | 41.05 | 49.82 | 66.35 | 30.67 | 1.94 | -0.28 | 2.50 | -2.35 | -21.97 | -4.09 | 16.73 | 23.44 | 18.06 | 22.21 |
The cash conversion cycle of PriceSmart Inc fluctuated over the past few reporting periods. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. A negative cash conversion cycle indicates that the company is able to collect cash from customers before needing to pay its suppliers, which can be beneficial for maintaining liquidity.
Looking at the data, PriceSmart Inc experienced a negative cash conversion cycle in some periods, implying efficient management of working capital and strong collection practices. However, in other periods, the company had positive cash conversion cycles, indicating a longer period between paying suppliers and receiving cash from customers, potentially leading to increased liquidity risk.
Overall, PriceSmart Inc's cash conversion cycle has shown variability, suggesting the need for continuous monitoring and management of working capital to optimize cash flow efficiency and maintain financial stability.