Shoe Carnival Inc (SCVL)

Shoe Carnival Inc's liquidity ratios show an improving trend over the years, indicating the company's strengthening ability to meet its short-term obligations.

- The current ratio, which measures the company's ability to cover its current liabilities with its current assets, has increased from 2.99 in January 2023 to 4.11 in January 2025. This suggests that Shoe Carnival has a healthy level of current assets relative to its current liabilities, providing a comfortable buffer for short-term obligations.

- The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of liquidity by excluding inventory from current assets. Shoe Carnival's quick ratio has also improved, rising from 0.40 in January 2023 to 0.94 in January 2025. This indicates the company's ability to meet its short-term liabilities with its most liquid assets, such as cash and marketable securities.

- The cash ratio, which focuses solely on the company's ability to cover its current liabilities with cash and cash equivalents, has followed a similar upward trend, increasing from 0.40 in January 2023 to 0.94 in January 2025. This highlights Shoe Carnival's strong liquidity position in terms of cash reserves to settle immediate obligations.

Overall, the increasing trend in Shoe Carnival Inc's liquidity ratios reflects a positive financial health aspect, showing an enhanced ability to handle short-term financial obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Shoe Carnival Inc has been fluctuating over the years. It stood at 144.08 days on January 28, 2023, increased to 179.45 days by January 31, 2023, decreased to 167.60 days by January 31, 2024, further dropped to 140.21 days by February 3, 2024, and then increased significantly to 181.82 days by January 31, 2025. This cycle measures the company's effectiveness in managing its inventory, receivables, and payables to generate cash flows. A lower cash conversion cycle indicates that the company is efficiently converting its resources into cash, while a higher cycle suggests potential inefficiencies in the working capital management process. Consequently, Shoe Carnival Inc may need to evaluate and optimize its inventory turnover, accounts receivable collection, and accounts payable payment policies to enhance its cash conversion efficiency.