VF Corporation (VFC)

Based on the provided data, the liquidity ratios of VF Corporation have shown some fluctuations over the past few years.

1. Current Ratio:
- The current ratio, which measures VF Corporation's ability to cover its short-term liabilities with its short-term assets, has been gradually declining. It stood at a healthy 3.65 on June 30, 2020, but decreased to 1.22 on March 31, 2024, and dropped further to 0.99 on June 30, 2024. This downward trend indicates a potential weakening in the company's short-term liquidity position.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. VF Corporation's quick ratio has generally followed a similar trend to the current ratio, with a decrease from 2.20 on June 30, 2020, to 0.39 on June 30, 2024. This suggests that the company may have more difficulty meeting its short-term obligations without relying on inventory.

3. Cash Ratio:
- The cash ratio, which indicates the proportion of current liabilities that can be covered by cash and cash equivalents, has also experienced a decline over the years. Starting at 1.66 on June 30, 2020, the cash ratio decreased to 0.14 on June 30, 2024. This trend reflects a decreasing ability of VF Corporation to settle its short-term obligations using only its cash holdings.

In summary, the liquidity ratios of VF Corporation indicate a weakening liquidity position over the years, as evidenced by the declining current ratio, quick ratio, and cash ratio. This trend may raise concerns about the company's ability to meet its short-term financial obligations efficiently in the future. It would be advisable for stakeholders to closely monitor the liquidity position of VF Corporation and assess potential strategies to improve its short-term financial stability.

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Additional liquidity measure

The cash conversion cycle (CCC) for VF Corporation has shown fluctuations over the reported periods. The CCC is an important metric that measures the time it takes for a company to convert its investments in inventory and other resources back into cash.

From the data provided, we can see that the CCC ranged from a high of 171.59 days on September 30, 2022, to a low of 0.00 days on March 31, 2025, where the CCC seems to have improved significantly. A lower CCC indicates that the company is able to efficiently manage its working capital and convert its assets into cash faster.

It is essential for a company like VF Corporation, which operates in the apparel and footwear industry and may have significant investments in inventory, to closely monitor its cash conversion cycle. By effectively managing its inventory levels, accounts receivable, and accounts payable, VF Corporation can optimize its CCC and improve its overall financial performance and liquidity.

Overall, VF Corporation should continue to focus on maintaining an optimal balance between its operating cycle components to ensure efficient working capital management and enhance its cash flow position. By monitoring and improving its cash conversion cycle, VF Corporation can enhance its financial health and sustain long-term profitability.