Dollar Tree Inc. (NASDAQ:DLTR)

Current Ratio

The current ratio experienced fluctuations over the periods presented. It began at 1.87 in early 2017 and decreased to 1.6 by early 2018. Subsequently, it rose to a peak of 2.05 in early 2019 before experiencing a significant decline to 1.2 in early 2020. In the following two years, there was mild improvement with values of 1.35 and 1.34 in early 2021 and 2022 respectively. Overall, this indicates variability in short-term liquidity, with a peak in 2019 followed by a notable reduction and slight stabilization.

Quick Ratio

The quick ratio shows a generally declining trend with some recovery towards the end of the period. Starting at 0.45 in early 2017, it dipped slightly to 0.42 in early 2018, then decreased more substantially to 0.25 in early 2019 and further to 0.18 in early 2020. The ratio experienced a partial rebound to 0.38 in early 2021 but declined again to 0.24 by early 2022. This pattern suggests a decrease in the company's ability to cover short-term liabilities with its most liquid assets, with some volatility in the latter years.

Cash Ratio

The cash ratio followed a trend similar to the quick ratio. It started at 0.41 in early 2017 and slightly decreased to 0.38 in early 2018. The ratio then declined more steeply to 0.20 in early 2019 and 0.15 in early 2020. A partial recovery occurred in early 2021 with an increase to 0.38 but decreased again to 0.24 by early 2022. This indicates a reduction in cash and cash equivalents relative to current liabilities over time, with some fluctuations in recent periods.

Current Assets

The current assets exhibited an overall upward trend from 2017 to 2022, increasing from approximately $3.94 billion in early 2017 to about $5.61 billion by early 2022. Despite a slight dip in 2019 and 2020, the figure rebounded strongly in 2021 and 2022, indicating improved liquidity position in recent years.

Current Liabilities

Current liabilities showed significant fluctuations during the period. Beginning at around $2.11 billion in early 2017, liabilities increased sharply to about $2.86 billion in early 2018, then decreased to approximately $2.10 billion in 2019. However, from 2020 onwards, current liabilities rose consistently, reaching close to $4.18 billion by early 2022, reflecting increased short-term obligations.

Current Ratio

The current ratio displayed notable variability over the analyzed period. Starting at 1.87 in 2017, it declined to 1.6 in 2018, then improved to 2.05 in 2019, marking the strongest liquidity position in the timeframe. Subsequently, the ratio decreased significantly to 1.2 in 2020 and stabilized around 1.35 by 2021 and 2022. This suggests a weakening in the company's ability to cover short-term liabilities from 2019 onwards, despite the increase in current assets.

The analysis of the financial data for the periods presented reveals several notable trends and patterns in liquidity measures.

Total Quick Assets

The total quick assets exhibit a fluctuating pattern over the years. Starting at 952.4 million US dollars in early 2017, the figure increased sharply to 1.1882 billion by early 2018. However, a significant decline occurred the following year, dropping to 523 million in early 2019. This downward trend slightly reversed in 2020 with an increase to 652.5 million, followed by a substantial rise in 2021 reaching 1.4167 billion. In 2022, total quick assets decreased again to 984.9 million. These fluctuations suggest variability in liquid asset management or varying operational cash flows across the years.

Current Liabilities

Current liabilities demonstrate a general upward trend throughout the reported periods. Starting at 2.1059 billion in early 2017, liabilities increased substantially to 2.8591 billion by early 2018. There was a temporary reduction to 2.0957 billion in early 2019, but from 2020 onwards, liabilities consistently rose, reaching 3.5465 billion in 2020, 3.7303 billion in 2021, and 4.1766 billion in 2022. This consistent increase indicates escalating short-term financial obligations, which could affect liquidity and working capital status.

Quick Ratio

The quick ratio, which provides a measure of short-term liquidity by comparing liquid assets to current liabilities, shows considerable variability and generally low values throughout the period. The ratio decreased from 0.45 in 2017 to 0.42 in 2018, then declined sharply to 0.25 in 2019 and further to 0.18 in 2020, indicating declining short-term liquidity relative to obligations. A recovery is observed in 2021, with the ratio rising to 0.38, suggesting improved liquidity. However, the ratio fell again to 0.24 in 2022. The consistently low quick ratio across most years implies potential challenges in covering immediate liabilities without relying on inventory sales.

In summary, while total quick assets have experienced significant fluctuations, current liabilities have steadily increased, exerting downward pressure on the quick ratio. The overall liquidity position, as reflected by the quick ratio, indicates vulnerability in meeting short-term obligations promptly, despite some temporary improvements. This dynamic underscores the importance of monitoring liquid asset levels and managing short-term debt obligations prudently to ensure sustainable liquidity.

Total Cash Assets

The total cash assets show notable fluctuations over the observed periods. Initially, there is an increase from approximately 870 million to nearly 1.1 billion US dollars between January 2017 and February 2018. This is followed by a sharp decline to around 422 million in February 2019. A moderate recovery occurs in February 2020, reaching about 539 million, which is further followed by a significant rise to approximately 1.42 billion in January 2021. The latest figure for January 2022 shows a decline to approximately 985 million. Overall, the cash asset levels demonstrate volatility with a general pattern of large swings rather than steady growth or decline.

Current Liabilities

Current liabilities exhibit an overall increasing trend throughout the periods. Starting at approximately 2.11 billion US dollars in January 2017, liabilities rise to around 2.86 billion in February 2018. A temporary reduction occurs in February 2019, with liabilities decreasing to roughly 2.10 billion. However, this is followed by a consistent increase through February 2020 and into the 2021 and 2022 periods, reaching the peak level of approximately 4.18 billion by January 2022. The upward trajectory from 2019 onward suggests growing short-term financial obligations.

Cash Ratio

The cash ratio, a measure of liquidity calculated as total cash assets divided by current liabilities, reveals a fluctuating but generally weak liquidity position. The ratio begins at 0.41 in January 2017, slightly decreases to 0.38 in February 2018, and then sharply drops to 0.20 in February 2019, indicating reduced liquidity. It further declines to 0.15 in February 2020, marking the lowest liquidity point within the dataset. Subsequently, there is an improvement to 0.38 in January 2021, suggesting a temporary strengthening of liquidity. The ratio declines again to 0.24 by January 2022, indicating a moderate liquidity position. Despite some recovery, the ratio remains below 0.5 for most periods, highlighting limited cash coverage of current liabilities.

Summary Insights

The data presents a company with considerable variability in cash holdings and steadily increasing current liabilities over the years, except for a dip in liabilities observed in early 2019. The cash ratio performance underscores periods of constrained liquidity, especially during 2019 and 2020, with some improvement in 2021 followed by a decline in 2022. The overall financial pattern suggests challenges in maintaining strong liquidity amidst rising short-term obligations, underscoring the importance of continuous monitoring and management of cash resources relative to liabilities.