Allete Inc (ALE)

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 1.08 1.45 1.45 1.66 1.24 1.22 1.17 1.23 1.00 1.02 0.93 0.86 0.54 0.43 0.47 0.66 0.55 0.42 0.31 0.44
Quick ratio 0.51 0.73 0.57 0.67 0.62 0.59 0.45 0.32 0.28 0.23 0.27 0.32 0.36 0.75 0.28 1.00 1.04 0.73 0.15 0.27
Cash ratio 0.08 0.32 0.13 0.12 0.19 0.30 0.13 0.06 0.05 0.06 0.11 0.11 0.08 0.58 0.10 0.80 0.75 0.59 0.04 0.11

The liquidity ratios of Allete Inc show a fluctuating trend over the reporting periods.

1. Current Ratio: The current ratio reflects Allete's ability to cover its short-term liabilities with its current assets. The ratio has shown improvement from a low of 0.31 as of June 30, 2020, to a high of 1.66 as of March 31, 2024. This indicates that Allete's liquidity position has strengthened over time, with the company being better able to meet its short-term obligations.

2. Quick Ratio: The quick ratio, which excludes inventory from current assets, provides a more stringent measure of liquidity. Allete's quick ratio has also shown variability, ranging from a low of 0.15 on June 30, 2020, to a high of 0.73 on September 30, 2020. The ratio has generally improved since then, with a value of 0.67 as of March 31, 2024. This suggests that Allete has become more efficient in meeting its short-term obligations without relying on inventory.

3. Cash Ratio: The cash ratio measures Allete's ability to cover its current liabilities with its cash and cash equivalents. The cash ratio has ranged from 0.04 on June 30, 2020, to 0.32 on September 30, 2024. The ratio fluctuates but has generally improved over the years. This indicates that Allete has been able to strengthen its ability to cover its short-term liabilities using its cash reserves.

Overall, the liquidity ratios of Allete Inc demonstrate an overall improvement in its liquidity position over the reporting periods, with the company becoming better equipped to meet its short-term obligations and maintain financial stability.

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 111.79 67.75 91.01 81.07 61.15 50.01 64.93 147.48 258.15 301.57 212.05 135.46 26.48 18.81 18.90 4.19 8.02 17.99 16.31 -200.19

The cash conversion cycle of Allete Inc has exhibited fluctuations over the reported periods. The cycle represents the time taken for the company to convert its investments in inventory and other resources into cash flow from sales.

The cycle was negative at times, indicating a potentially efficient use of cash, but it turned positive in some periods, implying a longer time span between the company's cash outflows for production inputs and the inflows from sales.

For example, the cycle was significantly negative at -200.19 days on March 31, 2020, and showed a gradual improvement until December 31, 2021, where it reached 26.48 days. However, in the subsequent periods, there was a notable increase in the cycle, peaking at 301.57 days on September 30, 2022, before declining to 67.75 days on September 30, 2024.

The longer cash conversion cycle could indicate potential issues with inventory management or challenges in collecting accounts receivable promptly. On the other hand, a shorter cycle suggests a quicker turnover of cash, which can be a positive sign of operational efficiency.

Overall, monitoring the cash conversion cycle is crucial for Allete Inc to optimize working capital management and ensure a healthy cash flow position.