Ralph Lauren Corp Class A (RL)

Ralph Lauren Corp Class A's liquidity ratios have shown some fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, was 2.66 in March 31, 2021, but decreased to 1.87 in March 31, 2022. However, the ratio improved thereafter, reaching 2.29 in March 31, 2024. In the most recent period ending March 31, 2025, the current ratio decreased to 1.78.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, followed a similar pattern. It decreased from 2.07 in March 31, 2021 to 1.36 in March 31, 2022, before increasing to 1.60 in March 31, 2024. However, it declined to 1.19 in March 31, 2025.

Lastly, the cash ratio, which indicates the proportion of current liabilities that could be covered by cash and cash equivalents, was 1.75 in March 31, 2021, and gradually declined to 0.98 in March 31, 2025.

Overall, the trend in Ralph Lauren Corp Class A's liquidity ratios shows some variability, with periods of improvement followed by decreases. It is essential for the company to carefully manage its current assets and liabilities to ensure it maintains a healthy level of liquidity to meet its short-term obligations.

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Additional liquidity measure

The cash conversion cycle of Ralph Lauren Corp Class A has shown fluctuating trends over the past five years.

As of March 31, 2021, the cash conversion cycle was at 137.54 days, reflecting the time it takes for the company to convert its invested resources into cash flows. Over the following year, the cycle decreased to 120.70 days, indicating an improvement in the efficiency of managing inventories and accounts receivable.

However, by March 31, 2023, the cash conversion cycle increased to 140.35 days, suggesting a delay in converting sales into cash. This could be due to factors such as slower collection of receivables or higher inventory holding periods.

In the subsequent year, the cycle improved to 125.46 days as of March 31, 2024, indicating efforts to streamline the cash conversion process. Finally, as of March 31, 2025, the cycle decreased significantly to 107.90 days, showcasing a more efficient management of working capital.

Overall, Ralph Lauren Corp Class A has experienced fluctuations in its cash conversion cycle, with periods of both improvements and challenges. Monitoring this metric is crucial for assessing the company's liquidity and operational efficiency.