Wingstop Inc (WING)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 4.52 1.40 1.93 2.17 2.03 1.97 4.05 3.14 3.63 3.68 3.98 1.89 1.77 1.50 1.64 1.68 1.44 1.43 1.42 1.17
Quick ratio 3.84 0.85 1.33 1.55 1.45 1.34 3.39 2.47 3.11 3.01 3.29 1.71 1.43 0.95 0.96 0.95 0.91 0.93 1.08 0.80
Cash ratio 3.61 0.71 1.14 1.37 1.27 1.16 3.21 2.47 2.96 2.86 3.15 1.67 1.22 0.85 0.84 0.83 0.81 0.84 0.96 0.69

The liquidity ratios of Wingstop Inc reflect the company's ability to meet its short-term obligations and manage its cash effectively.

1. Current Ratio:
- The current ratio shows a generally increasing trend over the years, from 1.17 in March 2020 to a peak of 4.52 in December 2024.
- A current ratio above 1 indicates that Wingstop Inc has more current assets than current liabilities, showing a healthy liquidity position.
- The significant increase in the current ratio in recent periods suggests improved short-term liquidity and the company's ability to cover its obligations comfortably.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, has shown fluctuations over the years but generally trends upward.
- Starting at 0.80 in March 2020, the ratio increased to 3.84 in December 2024, indicating an improvement in Wingstop Inc's ability to meet its immediate financial obligations without relying on inventory.
- The quick ratio exceeding 1 in most periods implies that the company can cover its short-term liabilities with its most liquid assets.

3. Cash Ratio:
- The cash ratio demonstrates the company's ability to pay off its current liabilities solely with cash and cash equivalents.
- Wingstop Inc's cash ratio has also demonstrated an increasing trend over the years, from 0.69 in March 2020 to 3.61 in December 2024.
- The consistent rise in the cash ratio indicates the company's strong cash position and ability to meet short-term obligations using cash reserves.

Overall, the liquidity ratios of Wingstop Inc illustrate a positive liquidity position characterized by improving current, quick, and cash ratios over the years. This suggests that the company is efficiently managing its working capital and has the capacity to meet its short-term financial commitments.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days -0.50 -7.94 -0.40 90.14 0.86 83.92 76.23 86.92 -3.63 0.11 87.85 -5.83 -4.20 77.69 73.21 78.30 -2.70 75.79 40.23 49.14

The cash conversion cycle of Wingstop Inc fluctuated over the periods reviewed. The company's cash conversion cycle represents the time it takes for Wingstop to convert its investments in inventory and other resources into cash flows from sales. With a negative cash conversion cycle, Wingstop is able to convert resources into cash before having to pay suppliers, which can be a positive indicator of operating efficiency. However, it is important to note that a negative cash conversion cycle could also imply aggressive payment terms with suppliers.

In the recent quarters, Wingstop experienced a mostly negative cash conversion cycle, signaling efficient management of its working capital. However, the cycle turned positive in some periods, indicating potential delays in collecting cash from sales or managing inventory levels. Wingstop should continue monitoring and managing its cash conversion cycle effectively to optimize its working capital management and liquidity position.