Applied Industrial Technologies (AIT)

Liquidity ratios

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 Dec 31, 2019 Sep 30, 2019
Current ratio 3.53 3.77 3.75 3.52 3.05 3.14 3.18 3.08 2.72 2.79 2.86 2.59 2.80 2.63 2.70 2.74 2.72 2.60 2.72 2.39
Quick ratio 2.37 2.49 2.39 2.26 1.95 1.85 1.83 1.82 1.68 1.74 1.69 1.67 1.81 1.75 1.72 1.73 1.69 1.54 1.50 1.31
Cash ratio 0.92 0.97 0.92 0.77 0.64 0.38 0.37 0.33 0.37 0.41 0.39 0.53 0.60 0.65 0.68 0.65 0.63 0.37 0.30 0.21

Applied Industrial Technologies has maintained strong liquidity levels over the period analyzed based on its current ratio, which has consistently been above 2. This indicates that the company has more than enough current assets to cover its current liabilities, with an increasing trend in the recent quarters. The current ratio stood at 3.53 as of June 30, 2024.

Similarly, the quick ratio, which excludes inventory from current assets, also reflects strong liquidity levels for the company. The quick ratio has generally been above 1, suggesting that Applied Industrial Technologies can meet its short-term obligations even if inventory is excluded. The quick ratio was 2.37 as of June 30, 2024.

In terms of the cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, Applied Industrial Technologies has also shown a solid ability to cover immediate liabilities with cash on hand. The cash ratio improved to 0.92 as of June 30, 2024, indicating an enhanced ability to meet short-term obligations solely with cash.

Overall, based on the current ratio, quick ratio, and cash ratio, Applied Industrial Technologies appears to have a robust liquidity position, with improving trends in recent quarters, providing a comfortable cushion to fulfill its short-term financial commitments.

Additional liquidity measure

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 Dec 31, 2019 Sep 30, 2019
Cash conversion cycle days 79.29 79.20 78.46 80.08 77.34 83.67 84.22 83.75 83.34 81.84 76.90 77.07 77.29 79.05 73.58 74.35 74.45 79.62 81.91 82.84

The cash conversion cycle of Applied Industrial Technologies has shown some fluctuations over the periods analyzed. The average cash conversion cycle over these periods is approximately 79 days.

The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally preferred as it indicates that the company is able to efficiently manage its working capital and quickly convert inventory into cash.

Applied Industrial Technologies has experienced some variability in its cash conversion cycle, with fluctuations ranging from around 73 days to 84 days. A higher number of days indicates a longer period between investing in inventory and receiving cash from sales, which can potentially strain the company's liquidity and operations.

It is crucial for Applied Industrial Technologies to monitor and manage its cash conversion cycle effectively to optimize its working capital management and ensure smooth operations. Analyzing the factors contributing to the fluctuations in the cash conversion cycle can provide valuable insights for improving operational efficiency and financial performance.