ABM Industries Incorporated (ABM)
Liquidity ratios
| Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.33 | 1.38 | 1.44 | 1.48 | 1.40 | 1.47 | 1.53 | 1.30 | 1.15 | 1.21 | 1.18 | 1.17 | 1.09 | 1.45 | 1.41 | 1.45 | 1.46 | 1.50 | 1.82 | 1.48 |
| Quick ratio | 0.03 | 0.05 | 0.03 | 0.03 | 0.04 | 0.06 | 0.06 | 0.06 | 0.05 | 0.04 | 0.03 | 0.02 | 0.03 | 0.44 | 0.38 | 0.35 | 0.37 | 0.22 | 0.55 | 0.05 |
| Cash ratio | 0.05 | 0.07 | 0.05 | 0.05 | 0.06 | 0.08 | 0.08 | 0.08 | 0.06 | 0.06 | 0.05 | 0.05 | 0.06 | 0.47 | 0.41 | 0.38 | 0.41 | 0.26 | 0.59 | 0.08 |
ABM Industries Incorporated's liquidity ratios indicate the company's ability to meet its short-term obligations. The current ratio has fluctuated over the past five years, ranging from 1.09 to 1.53, with a downward trend in recent quarters. While the current ratio remains above 1, indicating the company's current assets can cover its current liabilities, the decreasing trend suggests a potential risk in meeting short-term obligations.
The quick ratio, which excludes inventory from current assets, shows a similar downward trend, ranging from 0.02 to 0.06. This indicates a limited ability to cover immediate liabilities without relying on inventory liquidity. The quick ratio is consistently lower than the current ratio, indicating a reliance on inventory to meet short-term obligations.
The cash ratio, which measures the company's ability to cover current liabilities with its cash and cash equivalents, also shows a decreasing trend over the past five years, ranging from 0.05 to 0.59. While the cash ratio is generally higher than the quick ratio, suggesting a healthier position in terms of liquid assets, the downward trend may indicate potential cash flow challenges in meeting short-term obligations.
Overall, ABM Industries Incorporated's liquidity ratios suggest a decreasing ability to cover short-term obligations with liquid assets, posing a potential risk in maintaining financial stability. Further analysis of the company's cash flow and working capital management may be necessary to address these liquidity challenges.
Additional liquidity measure
| Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -14.52 | -12.75 | -11.85 | -11.45 | -10.47 | -10.38 | -7.32 | -8.48 | -11.42 | -10.65 | -8.80 | -9.79 | -12.17 | -8.63 | -8.83 | -8.47 | -11.64 | -7.53 | -9.94 | -9.65 |
The cash conversion cycle of ABM Industries Incorporated has shown fluctuations over the past few years, but overall, the company has managed to maintain a negative cash conversion cycle, indicating efficient management of its working capital. The cash conversion cycle represents the time taken by a company to convert its investment in inventory back into cash.
From October 2020 to October 2024, ABM Industries Incorporated has generally decreased its cash conversion cycle, showing an improvement in managing its cash flows. The negative values of the cash conversion cycle imply that the company is able to collect cash from its sales before having to pay its suppliers, which is a favorable position for liquidity and cash flow.
However, it is important to note that while a negative cash conversion cycle is generally a positive indicator, it is essential to strike the right balance to ensure that the company does not compromise on its relationships with suppliers by delaying payments excessively. ABM Industries Incorporated should continue to monitor and manage its cash conversion cycle effectively to sustain its financial efficiency and relationships with stakeholders.