Skyline Corporation (SKY)

Skyline Corporation's liquidity ratios show a favorable trend over the past few periods. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has steadily increased from 2.32 in June 30, 2020, to 4.39 in June 30, 2023. However, there was a slight decrease to 2.36 in March 31, 2024, and further to 2.33 in June 30, 2024. This ratio stood at 2.42 in September 30, 2024 and increased to 2.59 by December 31, 2024. Notably, there is missing data for March 31, 2025.

The quick ratio, which provides a stricter measure of liquidity by excluding inventory from current assets, has also shown a positive trend. It increased from 1.58 in June 30, 2020, to 3.45 in June 30, 2023. However, there was a decline to 1.44 in March 31, 2024, followed by a rise to 1.48 in June 30, 2024 and further to 1.54 in September 30, 2024. By December 31, 2024, the quick ratio was 1.65, indicating good liquidity. Similar to the current ratio, data for March 31, 2025, is missing.

The cash ratio, which measures a company's ability to cover current liabilities with its cash and cash equivalents, has shown a consistent increase over the periods. It rose from 1.33 in June 30, 2020, to 3.24 in June 30, 2023. However, there was a decrease to 1.27 in March 31, 2024, and a subsequent increase to 1.31 in June 30, 2024, and 1.36 in September 30, 2024. By December 31, 2024, the cash ratio stood at 1.48. Once again, data for March 31, 2025, is unavailable.

Overall, Skyline Corporation has maintained strong liquidity positions over the analyzed periods, as evidenced by the increasing trends in the current, quick, and cash ratios. It is important for the company to continue monitoring and managing its liquidity to ensure it can meet its short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Skyline Corporation has exhibited fluctuations over the periods provided. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. From June 30, 2020, to March 31, 2025, the cash conversion cycle ranged from a low of 41.39 days to a high of 79.29 days.

During the earlier periods, the cash conversion cycle showed relatively stable levels, hovering around the mid-40s to low 50s range. However, it experienced a significant increase and volatility in the latter periods, with peaks reaching as high as 79.29 days by March 31, 2024.

A longer cash conversion cycle indicates that Skyline Corporation takes more time to convert its investments into cash, potentially signaling inefficiencies in managing inventory, collecting receivables, or paying suppliers. However, it's worth noting that a longer cycle could also be a strategic decision to extend payment terms to suppliers or hold inventory to meet future demand.

Overall, fluctuations in the cash conversion cycle suggest changes in the company's operational efficiency and effectiveness in managing working capital. Further analysis of the underlying factors driving these fluctuations, such as changes in sales patterns, inventory management practices, or payment terms with suppliers and customers, would provide greater insights into Skyline Corporation's cash flow dynamics.