Urban Outfitters Inc (URBN)

The liquidity ratios of Urban Outfitters Inc, including the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term obligations.

The current ratio has shown a declining trend over the past five years, from 1.65 in 2020 to 1.29 in 2024. This indicates a decrease in the company's ability to cover its short-term liabilities with its current assets. Despite the decrease, the current ratio remains above 1, implying that Urban Outfitters Inc still has sufficient current assets to meet its current liabilities.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also declined over the years from 0.82 in 2020 to 0.54 in 2024. This downward trend suggests that the company may face challenges in meeting its short-term obligations without relying on inventory.

The cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, has also shown a decreasing trend from 0.68 in 2020 to 0.47 in 2024. This implies that Urban Outfitters Inc may have less cash on hand relative to its current liabilities, indicating a potential liquidity risk.

Overall, the liquidity ratios of Urban Outfitters Inc suggest a weakening liquidity position over the years, which may raise concerns about the company's ability to meet its short-term obligations. Investors and stakeholders should monitor these ratios closely to assess the company's liquidity risk and financial health.

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Additional liquidity measure

The cash conversion cycle of Urban Outfitters Inc has shown fluctuations over the past five years. The cycle decreased from 40.44 days in 2020 to 31.16 days in 2021, indicating an improvement in the efficiency of converting its investments in inventory and accounts receivable into cash. However, this trend reversed in the following years, with the cycle increasing to 36.83 days in 2022 and further to 41.18 days in 2023.

In the most recent period, as of January 31, 2024, the cash conversion cycle decreased to 36.39 days. Although it improved from the prior year, it remains higher than the levels seen in 2021. This suggests that Urban Outfitters Inc may be taking longer to convert its investments in inventory and receivables into cash compared to the recent past.

Overall, the trend in the cash conversion cycle of Urban Outfitters Inc indicates some variability in the efficiency of its working capital management over the years, with the company experiencing both improvements and setbacks in this key operational metric.