Under Armour Inc A (UAA)

The current ratio for Under Armour Inc A has been relatively stable over the years, standing at 2.30 as of December 31, 2021 and March 31, 2022, indicating that the company has more than enough current assets to cover its current liabilities. However, there was a slight decrease in the current ratio to 2.18 as of March 31, 2023, signaling a potential liquidity strain. This was followed by an improvement to 2.46 as of March 31, 2024, indicating better liquidity position but then declined to 2.10 as of March 31, 2025.

Similarly, the quick ratio, which provides a more stringent assessment of liquidity by excluding inventory, has also shown fluctuations. The quick ratio was 1.54 as of December 31, 2021 and March 31, 2022, dropping to 1.08 as of March 31, 2023, before recovering to 1.39 as of March 31, 2024. However, it fell to 1.06 as of March 31, 2025, suggesting a tighter liquidity position for Under Armour Inc A.

Furthermore, the cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has declined over the years. It stood at 1.15 as of December 31, 2021 and March 31, 2022, but dropped to 0.52 as of March 31, 2023, indicating a reduced ability to meet short-term obligations with cash on hand. The cash ratio continued to decrease to 0.74 as of March 31, 2024, and further to 0.45 as of March 31, 2025, suggesting a decreasing level of liquidity in terms of cash reserves.

In conclusion, while the current ratio and quick ratio have shown some fluctuations, the downward trend in the cash ratio raises concerns about Under Armour Inc A's ability to meet its short-term obligations with cash on hand. Management should closely monitor liquidity levels and consider strategies to improve cash reserves to ensure the company's financial health.

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Additional liquidity measure

The cash conversion cycle of Under Armour Inc A has shown fluctuations over the past years. As of December 31, 2021, and March 31, 2022, the company's cash conversion cycle stood at 62.17 days, indicating a relatively efficient management of cash, inventory, and accounts receivable.

However, there was a notable increase in the cash conversion cycle to 107.58 days as of March 31, 2023. This could suggest possible challenges in managing working capital efficiently, leading to a longer time taken to convert investments in raw materials into cash from sales.

The trend continued with a slight decrease to 104.90 days on March 31, 2024, but still significantly higher compared to the earlier periods. This may indicate ongoing issues with inventory management and collection of accounts receivable, impacting the company's overall liquidity position.

As of the most recent data available on March 31, 2025, the cash conversion cycle further increased to 117.78 days, reflecting a prolonged period for the company to convert its resources into cash. This could potentially signal a need for improved operational efficiency and working capital management strategies to enhance cash flow and overall financial performance.