AAON Inc (AAON)

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 2.79 3.06 2.99 3.13 3.23 3.03 2.76 2.79 2.40 2.36 2.40 2.48 2.51 3.65 3.30 3.68 3.73 3.67 2.87 3.07
Quick ratio 0.00 0.00 0.00 0.07 0.00 0.00 0.03 0.02 0.04 0.08 0.13 0.05 0.03 1.37 1.42 1.46 1.34 1.15 0.80 0.56
Cash ratio 0.00 0.00 0.00 0.07 0.00 0.00 0.03 0.02 0.04 0.08 0.13 0.05 0.03 1.37 1.42 1.46 1.34 1.15 0.80 0.56

AAON Inc's liquidity ratios provide insights into the company's ability to meet its short-term obligations.

1. Current Ratio: AAON Inc's current ratio has remained relatively stable over the years, ranging between 2.36 and 3.73. A current ratio above 1 indicates that the company has more current assets than current liabilities, and a ratio above 2 is considered healthy. AAON Inc's current ratio consistently staying above 2 signifies a strong ability to cover its short-term liabilities with its current assets.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, measures the company's ability to pay off its current liabilities without relying on the sale of inventory. AAON Inc's quick ratio has shown fluctuation, with values ranging from 0.00 to 1.46. A quick ratio of 1 or higher is generally preferred, as it indicates the company can cover its short-term liabilities with its most liquid assets. The erratic values of AAON Inc's quick ratio suggest variations in its liquidity position over time.

3. Cash Ratio: The cash ratio is the most conservative liquidity ratio, focusing solely on the company's ability to cover its current liabilities with cash and cash equivalents. AAON Inc's cash ratio has also exhibited volatility, with values ranging from 0.00 to 1.46. A high cash ratio indicates a strong ability to meet short-term obligations without relying on other current assets. The erratic fluctuations in AAON Inc's cash ratio may indicate fluctuations in its cash position over the years.

In conclusion, while AAON Inc's current ratio consistently indicates a strong ability to cover short-term obligations with current assets, the fluctuations in the quick ratio and cash ratio suggest varying levels of liquidity and ability to meet short-term obligations. Monitoring these ratios over time can provide valuable insights into AAON Inc's liquidity management and financial health.


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 85.14 83.35 87.76 95.44 101.29 104.30 107.44 103.58 111.50 110.39 117.27 118.30 119.86 103.22 88.34 88.45 83.66 79.38 87.92 74.62

The cash conversion cycle (CCC) of AAON Inc has shown some fluctuations over the periods analyzed. The CCC measures the average number of days it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to June 30, 2021, the CCC fluctuated between 74.62 days and 88.45 days, indicating variations in the company's efficiency in managing its working capital during that period. This suggests potential challenges in managing inventory levels, collection of receivables, and payment of payables.

Subsequently, from September 30, 2021, to December 31, 2024, the CCC experienced further fluctuations ranging from 83.35 days to 119.86 days. These fluctuations could indicate changes in the company's operational efficiency, such as delays in collecting receivables, possibly due to changing market conditions or shifts in the company's sales strategies.

Overall, the trend of the CCC for AAON Inc showed a general increase from the beginning of the data period, peaking at 119.86 days on December 31, 2021. However, it gradually decreased to 85.14 days by December 31, 2024. This decrease might indicate improvements in the company's working capital management efficiency during the latter part of the analyzed period.

Further analysis of the underlying drivers of the CCC fluctuations, such as changes in inventory turnover, accounts receivable collection periods, and accounts payable payment terms, would provide more insights into the company's operational and financial performance.