The Andersons Inc (ANDE)

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 1.72 1.80 1.82 1.44 1.37 1.41 1.39 1.29 1.37 1.45 1.32 1.27 1.25 1.40 1.51 1.31 1.35 1.40 1.36 1.30
Quick ratio 0.86 0.89 0.82 0.57 0.55 0.50 0.48 0.36 0.43 0.56 0.45 0.39 0.36 0.53 0.62 0.41 0.42 0.52 0.57 0.46
Cash ratio 0.39 0.31 0.08 0.04 0.05 0.06 0.03 0.01 0.09 0.13 0.02 0.02 0.02 0.04 0.03 0.01 0.04 0.01 0.01 0.02

The current ratio of Andersons Inc. has shown a fluctuating trend over the past eight quarters, ranging from a low of 1.29 in Q1 2022 to a high of 1.82 in Q2 2023. This ratio indicates the company's ability to cover its short-term obligations with its current assets. Generally, a current ratio above 1 suggests good liquidity, with the company being able to meet its current liabilities. Andersons Inc.'s current ratio has mostly remained above 1, reflecting a healthy liquidity position.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. Across the quarters, Andersons Inc.'s quick ratio has shown a similar pattern to the current ratio, with fluctuations but generally remaining above 1. This indicates the company's ability to cover its short-term obligations without relying on selling inventory.

The cash ratio, which is the most conservative liquidity ratio, focuses solely on the availability of cash and cash equivalents to cover current liabilities. Andersons Inc.'s cash ratio has varied widely over the quarters, with a low of 0.18 in Q1 2023 and a high of 0.54 in Q4 2023. A cash ratio below 1 signifies that the company does not have enough cash to cover its short-term liabilities alone. Despite the fluctuations, the company has maintained a reasonable cash position, ensuring a certain level of liquidity.

Overall, Andersons Inc. demonstrates adequate liquidity levels based on its current, quick, and cash ratios over the past eight quarters. The company has managed its short-term financial obligations effectively, although some fluctuations in the ratios suggest periodic changes in liquidity management strategies.

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 49.28 41.56 44.86 58.33 64.55 58.40 68.42 81.01 79.56 58.46 60.13 85.28 91.59 65.08 57.94 74.67 80.27 68.94 97.17 145.31

The cash conversion cycle of Andersons Inc. has shown fluctuation over the past eight quarters. In Q1 2022, the company had a high cash conversion cycle of 80.74 days, indicating that it took a relatively long time to convert its investments in inventory and other resources into cash. However, by Q3 2022, the cycle decreased to 58.38 days, signaling an improvement in the company's efficiency in managing its working capital.

Throughout 2022 and 2023, the cycle continued to vary, with the lowest being in Q3 2023 at 41.56 days and the highest in Q4 2022 at 64.29 days. A decreasing cash conversion cycle generally suggests that the company is managing its inventory well and collecting receivables efficiently, leading to quicker cash inflows.

Overall, Andersons Inc. should continue monitoring its cash conversion cycle to ensure an optimal balance between inventory management, accounts receivable collection, and accounts payable payment, as this directly impacts the company's liquidity and overall financial health.