Shoe Carnival Inc (SCVL)

The liquidity ratios of Shoe Carnival Inc, as depicted in the table, indicate the company's ability to meet its short-term obligations with its current assets.

The current ratio has shown a general upward trend over the years, increasing from 2.69 in 2020 to 3.76 in 2024. This indicates that the company has improved its ability to cover its current liabilities with its current assets. A current ratio above 1 suggests that Shoe Carnival Inc has more than enough current assets to cover its current liabilities, and the increasing trend is a positive sign for the company's short-term financial health.

The quick ratio, also known as the acid-test ratio, has fluctuated over the years, ranging from 0.42 in 2023 to 0.95 in 2022. This ratio measures the company's ability to cover its short-term obligations with its most liquid assets, excluding inventory. While the quick ratio is lower than the current ratio, the increasing trend from 2020 to 2022 suggests an improvement in the company's liquidity position.

The cash ratio, which provides the most conservative measure of liquidity by focusing solely on cash and cash equivalents, has also shown an upward trend over the years. The ratio has increased from 0.51 in 2020 to 0.87 in 2024, indicating that Shoe Carnival Inc has increased its ability to cover its current liabilities with its cash reserves.

Overall, the liquidity ratios of Shoe Carnival Inc demonstrate a positive trend in the company's ability to meet its short-term obligations with its current assets. The increasing current ratio, quick ratio, and cash ratio suggest an improvement in the company's liquidity position over the years.

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Additional liquidity measure

The cash conversion cycle measures how efficiently a company manages its cash flow by evaluating the time it takes to convert inventory into cash. For Shoe Carnival Inc, the trend in the cash conversion cycle has seen fluctuations over the past five years.

In the most recent fiscal year, the cash conversion cycle was 140.21 days, which indicates a slight improvement from the previous year's 144.08 days. However, when compared to the three years before that, the company's cash conversion cycle has increased significantly.

The increase in the cash conversion cycle from 94.61 days to 140.21 days over the past two years suggests that Shoe Carnival Inc may be taking longer to convert its inventory into cash. This could potentially signify challenges in managing its inventory levels efficiently or in collecting receivables promptly.

Overall, a higher cash conversion cycle indicates that the company may be facing liquidity issues or inefficiencies in its operations. It is important for Shoe Carnival Inc to closely monitor and improve its cash conversion cycle to ensure optimal cash flow management and operational efficiency.