Upbound Group Inc. (UPBD)

The liquidity ratios of Upbound Group Inc. over the past five years indicate a consistent trend of declining liquidity.

The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has decreased from 0.22 in 2019 to 0.16 in 2023. This suggests that the company may be struggling to cover its short-term liabilities with its current assets.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown a downward trend from 0.21 in 2019 to 0.15 in 2023. This indicates that the company's ability to meet its immediate obligations without relying on inventory has weakened over the years.

The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has followed the same declining pattern from 0.21 in 2019 to 0.15 in 2023. This suggests that the company's cash position relative to its current liabilities has deteriorated.

Overall, the declining trend in all three liquidity ratios indicates that Upbound Group Inc. may be facing challenges in managing its short-term liquidity and may need to implement measures to improve its cash position and ability to meet its financial obligations in a timely manner.

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Additional liquidity measure

The cash conversion cycle of Upbound Group Inc. has shown consistency over the past five years. In 2021, the company achieved a significant improvement in its cash conversion cycle, which decreased to 1.00 days from 1.74 days in 2020. However, in the following years (2022 and 2023), the cash conversion cycle increased slightly to 1.18 days and 1.19 days, respectively.

A cash conversion cycle of around one day indicates that Upbound Group Inc. efficiently manages its cash flow and working capital. This suggests that the company can quickly convert its investments in inventory into cash receipts from sales. By keeping the cash conversion cycle low, the company can reduce the amount of time it takes to recoup its investments in inventory and operating expenses, thus enhancing its overall liquidity and financial health.

Overall, Upbound Group Inc. has effectively maintained a relatively short cash conversion cycle, demonstrating good management of its working capital and efficient operations over the years analyzed.