AAON Inc (AAON)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 3.23 | 2.40 | 2.51 | 3.73 | 3.35 |
| Quick ratio | 1.09 | 0.91 | 0.91 | 2.22 | 1.70 |
| Cash ratio | 0.00 | 0.04 | 0.03 | 1.34 | 0.48 |
The liquidity ratios of AAON Inc., as reflected in the data provided, have shown fluctuations over the past five years.
1. Current Ratio: AAON Inc.'s current ratio has fluctuated between 2.40 and 3.73 over the period, indicating the company's ability to cover its short-term liabilities with its current assets. The ratio has generally been above 2, suggesting a healthy liquidity position.
2. Quick Ratio: The quick ratio has also varied over the years, ranging from 1.00 to 2.28. This ratio excludes inventory from current assets, providing a more conservative measure of liquidity. AAON Inc. has generally maintained a quick ratio above 1, indicating a reasonable ability to meet short-term obligations without relying on inventory liquidation.
3. Cash Ratio: AAON Inc.'s cash ratio has exhibited significant fluctuations from 0.12 to 1.40. This ratio measures the company's ability to cover short-term liabilities with its cash and cash equivalents alone. Despite the fluctuations, the company has generally had a cash ratio above 1, indicating a strong ability to cover immediate obligations with cash on hand.
In conclusion, AAON Inc. has demonstrated a generally strong liquidity position over the years, with current, quick, and cash ratios consistently above benchmarks that indicate sound liquidity. However, the fluctuations in these ratios may warrant further investigation into the company's management of its working capital and short-term assets.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 113.23 | 123.83 | 129.83 | 95.27 | 108.17 |
The cash conversion cycle of AAON Inc. has exhibited some fluctuations over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.
In 2023, the cash conversion cycle decreased to 131.39 days from 138.21 days in 2022, indicating an improvement in the company's efficiency in managing its working capital. However, compared to 2020 and 2019, the cycle has increased, suggesting potential challenges in inventory turnover and collection of receivables.
The trend of the cash conversion cycle over the years reflects changes in AAON Inc.'s ability to effectively manage its operating cycle, inventory levels, and accounts receivable. Analyzing the components of the cycle and identifying ways to streamline processes could help AAON Inc. enhance its cash flow management and overall financial performance.