Winnebago Industries Inc (WGO)

Winnebago Industries Inc's liquidity position can be assessed through various ratios, including the current ratio, quick ratio, and cash ratio.

1. Current Ratio:
The current ratio measures the company's ability to meet its short-term obligations with its current assets. Winnebago Industries Inc's current ratio has been relatively stable over the past five years, ranging from 2.10 to 2.60. The current ratio for the latest year, as of Aug 31, 2024, stands at 2.44, indicating that the company possesses $2.44 in current assets for every $1 in current liabilities.

2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Winnebago Industries Inc's quick ratio has ranged from 1.03 to 1.80 over the five-year period. As of Aug 31, 2024, the quick ratio is 1.29, indicating that the company has $1.29 of quick assets available to cover each $1 of current liabilities.

3. Cash Ratio:
The cash ratio is the most conservative measure of liquidity, focusing solely on the company's ability to cover current liabilities with its cash and cash equivalents. Winnebago Industries Inc's cash ratio has fluctuated over the years, ranging from 0.54 to 1.14. As of Aug 31, 2024, the cash ratio stands at 0.82, implying that the company has $0.82 in cash and cash equivalents for every $1 of current liabilities.

Overall, Winnebago Industries Inc has maintained a solid liquidity position over the past five years, with current, quick, and cash ratios generally above 1, indicating a sufficient ability to meet short-term obligations. However, slight fluctuations in these ratios suggest the need for ongoing monitoring to ensure continued liquidity strength.

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Additional liquidity measure

The cash conversion cycle of Winnebago Industries Inc has shown a fluctuating trend over the past five years. In the most recent fiscal year ending August 31, 2024, the company's cash conversion cycle was 60.67 days, indicating that it took approximately 60.67 days for Winnebago Industries Inc to convert its investments in raw materials and inventory into cash from sales.

Comparing this to the previous years, there has been a slight increase from the 56.84 days in 2023 but a notable increase compared to the 44.56 days in 2022, 44.05 days in 2021, and 42.94 days in 2020. This suggests that Winnebago Industries Inc has experienced challenges in managing its cash conversion cycle efficiency in the most recent fiscal year.

A longer cash conversion cycle generally indicates that the company is taking longer to generate cash from its operating activities, which may be a concern as it can tie up working capital and potentially lead to liquidity issues. Winnebago Industries Inc may need to investigate the causes behind the lengthening of its cash conversion cycle and look for ways to improve efficiency in managing its inventory, accounts receivable, and accounts payable to enhance its overall financial performance and liquidity position.