Upbound Group Inc. (UPBD)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.16 | 0.26 | 0.22 | 0.41 | 0.34 | 0.39 | 0.27 | 0.22 | 0.31 | 0.32 | 0.28 | 0.23 | 0.42 | 0.48 | 0.47 | 0.56 | 0.22 | 0.18 | 0.87 | 0.54 |
| Quick ratio | 0.15 | 0.24 | 0.21 | 0.39 | 0.32 | 0.37 | 0.26 | 0.21 | 0.29 | 0.31 | 0.27 | 0.22 | 0.41 | 0.47 | 0.46 | 0.54 | 0.21 | 0.18 | 0.86 | 0.53 |
| Cash ratio | 0.15 | 0.24 | 0.21 | 0.39 | 0.32 | 0.37 | 0.26 | 0.21 | 0.29 | 0.31 | 0.27 | 0.22 | 0.41 | 0.47 | 0.46 | 0.54 | 0.21 | 0.18 | 0.86 | 0.53 |
Upbound Group Inc.'s liquidity ratios, namely the current ratio, quick ratio, and cash ratio, provide insight into the company's ability to meet its short-term obligations and manage cash flow effectively.
The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has shown fluctuations over the periods analyzed. The ratio has ranged between 0.16 to 0.56, with the highest value in March 2020 and the lowest in December 2023. Generally, a current ratio below 1 indicates that the company may have difficulty meeting its short-term obligations with its current assets alone.
The quick ratio, which indicates the company's ability to meet short-term obligations with its most liquid assets, has followed a similar trend to the current ratio. Ranging from 0.15 to 0.54, the quick ratio reflects the company's ability to cover immediate liabilities without relying on inventory. Like the current ratio, a quick ratio below 1 may suggest potential liquidity challenges.
The cash ratio, specifically focusing on the company's ability to cover short-term liabilities with its cash and cash equivalents, has also displayed variability but generally in alignment with the current and quick ratios. This ratio has fluctuated between 0.15 and 0.54, reflecting the cash position's impact on the company's ability to fulfill immediate obligations.
In summary, the liquidity ratios of Upbound Group Inc. indicate a fluctuating trend in its ability to meet short-term obligations with current assets, liquid assets, and cash reserves. The company may need to focus on improving its liquidity position to ensure it can meet its short-term financial commitments consistently in the future.
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 1.19 | 1.03 | 0.93 | 1.08 | 1.18 | 1.11 | 0.92 | 0.81 | 1.00 | 1.28 | 1.24 | 1.51 | 1.74 | 1.41 | 1.47 | 1.83 | 1.74 | 1.31 | 1.42 | 1.36 |
The cash conversion cycle of Upbound Group Inc. measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. Looking at the historical trend, we observe fluctuations in the cash conversion cycle over the periods provided.
In the most recent period of December 31, 2023, the cash conversion cycle stood at 1.19 days, indicating that on average, it took the company just over a day to convert its resources into cash from sales. This represents a slight increase from the previous quarter's value of 1.03 days but remains relatively efficient.
Examining further back, we can see variations in the cash conversion cycle throughout the previous quarters, suggesting potential changes in the company's operational efficiency and management of working capital. Notably, there was a peak in the cycle during the first quarter of 2021 at 1.74 days, which may indicate temporary challenges in converting investments into cash flows efficiently during that period.
Overall, by monitoring the cash conversion cycle over time, investors and stakeholders can assess Upbound Group Inc.'s ability to manage its working capital effectively, optimize inventory levels, and streamline its cash flow operations. The company's efforts to maintain a shorter cash conversion cycle can lead to improved liquidity, profitability, and financial performance in the long run.