Deckers Outdoor Corp. (NYSE:DECK)

The company's liquidity ratios over the observed periods demonstrate fluctuations with notable seasonal and cyclical patterns. Analysis of the current ratio reveals variability with values ranging roughly between 2.4 and 4.8, indicating fluctuating levels of current assets relative to current liabilities. Peaks tend to occur around the first quarter of some years, such as March 31, 2018 and March 31, 2019, suggesting periods of temporarily enhanced liquidity. However, the ratio sometimes dips below 3, signaling periods where current assets are less than three times current liabilities but still generally maintaining a solid liquidity position.

The quick ratio trends illustrate a similar pattern but within a narrower band, typically oscillating between about 1.1 and 3.1. This metric reflects the company's ability to meet short-term obligations with its most liquid assets, excluding inventories. The quick ratio peaks align with those of the current ratio, especially noticeable at the end of 2017 and the beginning of 2018, where the quick ratio approached or exceeded 3. This suggests improved liquid asset coverage during these points. Lower values around 1.1 correspond to quarters with relatively restrained liquid asset reserves, yet still above a critical threshold of 1, which implies that the company generally maintains adequate quick liquidity.

Turning to the cash ratio, which is the most conservative liquidity measure, values similarly fluctuate but within a band of approximately 0.4 to 2.3. The cash ratio notably spikes in early 2018 and early 2019, reaching values over 2, indicating significant cash and near-cash holdings relative to current liabilities during these intervals. However, there are quarters, especially in the middle of periods such as September 2018 and September 2019, where the ratio declines below 1, reflecting tighter cash positions. Nonetheless, since it rarely dips significantly below 1, the company appears to maintain satisfactory cash reserves to cover immediate liabilities in most periods.

Overall, the liquidity trends suggest that the company experiences seasonal or cyclical variations in its short-term financial position but maintains a healthy liquidity profile throughout the period. The recurrent increases in liquidity metrics during early quarters could be indicative of cash flow dynamics tied to business operations or inventory cycles. Despite fluctuating levels, the company sustains ratios that generally exceed critical benchmarks, indicating ongoing capacity to meet short-term financial obligations.

The analysis of the data over the presented periods reveals notable fluctuations in the liquidity position as indicated by the current assets, current liabilities, and the current ratio.

Current Assets

The current assets generally exhibit an upward trend across the quarters, starting from approximately 903 million USD in June 2017 and reaching around 2.65 billion USD by December 2023. There are seasonal peaks and troughs, with significant increases observed toward the end of calendar years, particularly in December quarters, indicative of possible inventory buildup or increased receivables typical of holiday sales periods. Although some quarters see temporary declines, the overall trajectory suggests sustained growth in liquid resources.

Current Liabilities

Current liabilities show higher volatility throughout the periods. Initial values are around 286 million USD in mid-2017, escalating to a broad range with some quarters peaking above 800 million USD, such as December 2022 and December 2023. The data suggests varying operational or short-term financing pressures, with some periods reflecting increased obligations that may align with expanded operational activity or seasonally higher payables.

Current Ratio

The current ratio, representing current assets divided by current liabilities, fluctuates significantly but remains generally above 2.0 in most quarters, indicating that the company maintains a buffer of current assets over liabilities. Peaks in this ratio occur notably during the first quarters of years, such as March 2018 (4.81) and March 2020 (3.97), implying better liquidity during these periods, possibly from post-holiday cash conversion or working capital adjustments. Conversely, some quarters show ratios closer to 2.4–2.7, reflecting relatively lower short-term liquidity but still a comfortable margin above 1.0.

In summary, the data indicates that while the company exhibits growth in its current asset base over time, it also experiences significant fluctuations in current liabilities, affecting the current ratio cyclically. The liquidity position appears generally strong, with current ratios consistently above 2, suggesting effective management of working capital and an adequate ability to meet short-term obligations. Seasonal patterns are apparent, with end-of-year increases in assets and liabilities, followed by subsequent adjustments in early quarters, reflecting normal business cycles.

Total Quick Assets

The total quick assets have demonstrated notable volatility over the examined period. From June 2017 through December 2017, these assets rose significantly, reaching a peak close to 726 million US dollars. However, there was a sharp decrease in the first quarter of 2018, followed by fluctuations with another peak during the last quarter of 2019 at over 900 million US dollars. A significant surge took place between the last quarter of 2020 and March 2021, where total quick assets nearly doubled, reaching approximately 1.47 billion US dollars. Following this peak, there was a gradual decline until the second quarter of 2022, after which assets again showed upward movement, reaching nearly 2 billion US dollars by the end of 2023.

Current Liabilities

Current liabilities showed considerable variation, generally paralleling some of the volatility seen in quick assets but with differing magnitudes and timing of spikes and dips. Starting at roughly 286 million US dollars in mid-2017, liabilities surged to nearly 474 million by the third quarter of 2017, then decreased sharply to about 189 million in the first quarter of 2018. From there, liabilities oscillated, rising to peaks above 680 million in late 2021, before declining noticeably in the first quarter of 2023. Toward the end of the period, current liabilities once again increased, reaching over 920 million US dollars by the last quarter of 2023.

Quick Ratio

The quick ratio exhibited significant fluctuation across the periods but generally maintained values above 1, indicating that quick assets consistently exceeded current liabilities. Early periods showed extreme variability, with a peak ratio of over 3 in the first quarter of 2018 and the first quarter of 2019. The trend stabilized somewhat through 2020, fluctuating mostly between 1.8 and 2.8. Following a high of approximately 2.8 in early 2021, the ratio declined gradually until mid-2022, reaching levels close to 1.17. Subsequently, the quick ratio rebounded, ending the period in 2023 with values above 2, suggesting improved short-term liquidity relative to current liabilities.

Overall Observations

The data illustrates that the company experienced periods of strong liquidity evidenced by high quick ratios and increases in quick assets, especially notable in early 2018, late 2019, early 2021, and at the end of 2023. Conversely, these periods were interspersed with times of diminishing liquidity and rising liabilities. Despite fluctuations, the quick ratio consistently remained above 1, indicating a capacity to cover current liabilities with quick assets throughout the entire timeframe. The patterns suggest proactive management of liquid resources and current liabilities, with cycles possibly related to seasonal or market conditions affecting cash and receivables.

Total Cash Assets

The total cash assets exhibit a high degree of volatility across the observed periods. Initially, there is a moderate cash level around mid-2017, followed by a substantial increase by the end of 2017. In early 2018, cash assets show some fluctuation, with a general trend downward reaching a low point in September 2018. After this, cash levels recover sharply towards the end of 2018 and early 2019. A notable decline occurs again in late 2019 through early 2020, likely influenced by external factors impacting cash flow. Subsequently, cash assets sharply increase starting late 2020, peaking in mid-2021, then trending downward with intermittent rebounds through 2022 and 2023. The final value reported in late 2023 is substantially higher than many prior periods, indicating stronger liquidity or cash reserves towards the end of the dataset.

Current Liabilities

Current liabilities also fluctuate considerably throughout the periods. There is an initial rise from mid-2017 to late 2017, followed by a sharp decrease by early 2018. Mid-2018 shows elevated liabilities again, continuing to fluctuate seasonally with local peaks typically in the last quarters of each year. A notable peak occurs in the fourth quarter of 2021, reaching the highest observed level in the dataset. From early 2022 onward, current liabilities remain elevated with periodic increases, surpassing 700,000 US$ thousands in most quarters and nearing just over 900,000 US$ thousands by the end of 2023. The increasing trend in liabilities in the latter periods suggests growing short-term obligations or increased operational scale.

Cash Ratio

The cash ratio demonstrates considerable variability corresponding with changes in cash assets and current liabilities. Peaks are observed primarily in early quarters of the years, with values often exceeding 2.0, indicating exceptionally strong liquidity during these times. Conversely, the ratio drops below 1.0 in several quarters, particularly in mid-to-late 2017, mid-2018, and late 2019, signaling periods where cash assets were insufficient to cover current liabilities fully. Notably, in the years 2020 and 2021, the cash ratio generally remains above 1.0, reflecting improved liquidity, with multiple quarters showing values around or above 2.0. The trend in cash ratio through 2022 and 2023 is mixed with fluctuations between approximately 0.58 and 1.97, implying episodic liquidity pressure but overall maintaining an adequate cash buffer relative to short-term liabilities.