Allete Inc (ALE)

Liquidity ratios

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 Jun 30, 2019 Mar 31, 2019
Current ratio 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 0.53 0.61 1.34 1.73
Quick ratio 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 0.37 0.38 0.98 1.40
Cash ratio 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 0.14 0.21 0.68 1.10

The current ratio for Allete, Inc. has shown a generally stable trend over the past eight quarters, ranging from 0.86 to 1.24. A current ratio above 1 indicates that the company has more current assets than current liabilities, providing some cushion for its short-term obligations. However, the current ratio peaked in Q4 2023, suggesting an improvement in the company's short-term liquidity position.

In terms of the quick ratio, Allete, Inc. has also demonstrated consistency in its performance, albeit at a lower level compared to the current ratio. Ranging from 0.35 to 0.78 over the past eight quarters, the quick ratio indicates the company's ability to meet its immediate liquidity needs without relying on inventory. The fluctuations in the quick ratio highlight some variability in the composition of Allete's current assets.

The cash ratio, which provides the most stringent measure of liquidity by considering only cash and cash equivalents, has also varied for Allete, Inc. In particular, the cash ratio ranged from 0.17 to 0.49 over the past two years. A cash ratio below 1 means the company does not hold enough cash to cover its current liabilities, signaling a potential reliance on other liquid assets.

Overall, while the current ratio suggests Allete, Inc. has maintained a relatively healthy short-term liquidity position, the quick ratio and cash ratio reveal a more conservative assessment of the company's ability to meet its immediate obligations solely through liquid assets. Monitoring these ratios closely is essential to understanding Allete's liquidity management and financial health.

Additional liquidity measure

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 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 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 -189.67 -61.11 -70.93 -48.23

The cash conversion cycle measures how long a company takes to convert its investments in inventory and other resources into cash flows from sales. Allete, Inc.'s cash conversion cycle has varied significantly over the past eight quarters, reflecting changes in its operational efficiency and liquidity management.

In Q4 2023, Allete's cash conversion cycle was 54.58 days, which is an improvement from the previous quarter. This suggests that the company managed to reduce the time it takes to convert its investments into cash flows, potentially through more effective inventory management or quicker collection of receivables.

However, the cash conversion cycle in Q4 2023 remains higher than in Q2 and Q3 2023, indicating that Allete may still have room to further optimize its working capital management.

In comparison to the previous year, Allete's cash conversion cycle has shown a general trend of improvement. In Q4 2022, the company had a significantly longer cash conversion cycle of 208.91 days, which suggests that Allete has managed to streamline its operations and enhance its liquidity position over time.

Overall, Allete's cash conversion cycle fluctuates, but the general trend indicates a positive direction in managing its working capital efficiently. Further analysis of the company's specific strategies and financial performance may provide insights into the factors driving these fluctuations and improvements in its cash conversion cycle.