Marriot Vacations Worldwide (VAC)

Marriott Vacations Worldwide Corp's liquidity ratios show consistency over the years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has remained relatively stable, ranging between 2.70 and 2.86. This indicates that the company has a comfortable buffer of current assets to cover its current liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also reflects stable performance, ranging from 1.87 to 2.04. This suggests that Marriott Vacations Worldwide Corp can cover its short-term obligations without relying on inventory liquidation.

However, the cash ratio, which provides a more conservative view of liquidity by considering only cash and cash equivalents against current liabilities, shows more volatility. The ratio ranged from 0.17 to 0.39 over the past five years. A lower cash ratio in certain years may indicate a lower level of immediate cash available to cover short-term obligations.

Overall, Marriott Vacations Worldwide Corp's liquidity position appears strong, with consistent current and quick ratios indicating a healthy level of short-term liquidity. However, fluctuations in the cash ratio warrant further investigation to understand the company's cash management practices and potential impact on liquidity in different periods.

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Additional liquidity measure

Marriott Vacations Worldwide Corp's cash conversion cycle has shown fluctuations over the past five years. The company's cash conversion cycle decreased from 377.87 days in 2019 to 294.72 days in 2022, indicating an improvement in its efficiency in managing cash flow from operations, inventory, and receivables.

However, there was a noticeable increase in the cash conversion cycle in 2021 to 366.68 days, suggesting that the company took longer to convert its resources into cash during that year. The most significant improvement was seen in 2023, with a cash conversion cycle of 299.45 days, potentially reflecting enhanced working capital management practices at Marriott Vacations Worldwide Corp.

Overall, the trend indicates that the company has made efforts to streamline its cash conversion cycle, aiming for a more efficient use of its resources to generate cash inflows. This improvement is a positive sign for the company's financial health and operational effectiveness.