Vestis Corporation (VSTS)

Based on the provided data, Vestis Corporation's liquidity ratios have shown significant fluctuations over the past few quarters.

1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its current assets. Vestis Corporation's current ratio ranged from 0.06 to 2.61 over the past four quarters. A higher current ratio is generally considered favorable as it indicates that the company has more current assets to cover its current liabilities. The company's current ratio has shown volatility, with a notable increase in the most recent quarter compared to the previous periods.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. Vestis Corporation's quick ratio has ranged from 0.06 to 1.15 over the past four quarters. A quick ratio below 1 may indicate potential liquidity issues, as the company may struggle to meet its short-term obligations without relying on selling inventory. The company's quick ratio has varied significantly, with a notable improvement in the most recent quarter compared to the earlier periods.

3. Cash Ratio: The cash ratio is the most conservative liquidity metric, measuring the company's ability to cover its current liabilities with cash and cash equivalents alone. Vestis Corporation's cash ratio has ranged from 0.06 to 0.12 over the past four quarters. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on other current assets. The company's cash ratio has shown some fluctuation, with the most recent quarter showing a slight improvement compared to the earlier periods.

Overall, the analysis reveals that Vestis Corporation has experienced fluctuations in its liquidity ratios, which may indicate changes in the company's short-term financial health and ability to meet its obligations. It is essential for stakeholders to closely monitor these ratios to assess the company's liquidity position accurately.

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Additional liquidity measure

The cash conversion cycle of Vestis Corporation has fluctuated over the past seven quarters, indicating changes in the efficiency of the company's working capital management.

In the most recent quarter, as of September 30, 2024, the company's cash conversion cycle stands at 23.33 days, which is a significant improvement compared to the previous quarter. This suggests that Vestis Corporation has managed to streamline its working capital processes, resulting in a quicker conversion of resources into cash.

Conversely, looking back to the third quarter of 2023, the cash conversion cycle was notably longer at 106.29 days, indicating a less efficient management of working capital during that period.

Overall, analyzing the trend of the cash conversion cycle for Vestis Corporation reveals a mix of improvements and fluctuations in working capital efficiency over the analyzed quarters, highlighting the need for consistent monitoring and optimization of the company's cash conversion processes.