Steven Madden Ltd (SHOO)

Based on the provided data, Steven Madden Ltd's liquidity ratios have shown fluctuations over the years.

1. Current Ratio: The company's current ratio, which indicates its ability to cover short-term liabilities with its current assets, decreased from 2.96 in 2020 to 2.17 in 2021. However, it improved in the following years, reaching 2.63 in 2022, but then declined to 2.26 in 2023 and further to 2.16 in 2024. Overall, the current ratio remains above 1, indicating that Steven Madden Ltd has more than enough current assets to cover its short-term obligations.

2. Quick Ratio: The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, decreased from 2.29 in 2020 to 1.44 in 2021. It showed further declines in the subsequent years, reaching 0.57 in 2023 and 0.48 in 2024. This downward trend suggests potential challenges in meeting short-term obligations without relying on selling inventory.

3. Cash Ratio: The cash ratio, which measures the ability to cover short-term liabilities with cash and cash equivalents, also declined over the years. It dropped from 1.22 in 2020 to 0.61 in 2021, and then fluctuated between 0.49 and 0.90 in the following years. While the company is maintaining a certain level of cash to cover its short-term obligations, the decreasing trend indicates potential liquidity constraints.

In summary, while Steven Madden Ltd generally maintains acceptable liquidity levels based on the current and quick ratios, the downward trend in quick and cash ratios over the years may raise concerns about the company's ability to meet short-term obligations without relying on selling inventory or other assets.

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Additional liquidity measure

The cash conversion cycle (CCC) of Steven Madden Ltd has shown fluctuations over the years, indicating changes in the company's efficiency in managing its cash flows related to its operations.

In December 2020, the CCC was 90.36 days, which suggests that on average, it took the company approximately 90 days to convert its investments in inventory into cash receipts from sales. This indicates a moderate efficiency in managing the company's working capital.

By December 2021, the CCC had increased to 110.74 days, signaling a longer cycle and potentially slower cash conversion. This increase may be attributed to factors like extended payment terms with suppliers or higher levels of inventory on hand.

However, by December 2022, the CCC decreased significantly to 71.42 days, indicating improved efficiency in converting inventory into sales and subsequently into cash. This improvement may be a result of better inventory management practices or faster collection of receivables.

In December 2023, the CCC dropped further to 21.55 days, reflecting a substantial enhancement in the company's cash conversion efficiency. A significantly shorter CCC suggests that the company is managing its working capital more effectively, potentially leading to enhanced liquidity and reduced risk.

The most recent data in December 2024 shows a further decrease in the CCC to 13.76 days, highlighting continued efficiency in converting resources into cash. This trend indicates that Steven Madden Ltd has been able to streamline its operations and optimize its working capital management.

Overall, the evolving trend in Steven Madden Ltd's cash conversion cycle suggests a focus on improving working capital efficiency, which can positively impact the company's financial performance and overall liquidity position.