Arrow Electronics Inc (ARW)

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 1.46 1.46 1.48 1.49 1.39 1.45 1.61 1.62 1.48 1.50 1.49 1.49 1.40 1.44 1.44 1.47 1.44 1.47 1.45 1.46
Quick ratio 1.05 1.00 0.98 1.00 0.94 0.92 1.06 0.02 1.01 0.03 0.02 0.02 1.00 0.03 0.03 0.04 0.05 0.04 0.04 0.03
Cash ratio 0.01 0.02 0.02 0.02 0.02 0.03 0.02 0.02 0.01 0.03 0.02 0.02 0.02 0.03 0.03 0.04 0.05 0.04 0.04 0.03

Arrow Electronics Inc's current ratio fluctuated over the analyzed period but generally remained above 1, indicating that the company had sufficient current assets to cover its current liabilities. The company's current ratio ranged from 1.39 to 1.62, with the highest value reported as of March 31, 2023.

In terms of the quick ratio, which provides a more conservative measure of liquidity by excluding inventories from current assets, Arrow Electronics Inc's ratio was relatively low initially and showed significant variability. However, the quick ratio improved significantly from December 31, 2021, to reach levels above 1, which can be attributed to a sudden increase in liquid assets relative to current liabilities. This suggests the company had a strong ability to meet its short-term obligations without relying heavily on inventory.

The cash ratio, which is the most stringent liquidity ratio, measures a company's ability to cover its current liabilities with its most liquid assets (cash and equivalents). Arrow Electronics Inc's cash ratio generally remained low over the analyzed period, ranging between 0.01 to 0.05. This indicates the company may have had some challenges meeting its short-term obligations with its cash holdings alone.

Overall, Arrow Electronics Inc's liquidity ratios suggest that while the company had a relatively healthy current ratio and a significant improvement in the quick ratio in recent periods, the cash ratio remained on the lower side, indicating that the company may have had limited cash reserves to cover its short-term liabilities.

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 76.42 79.27 76.13 73.84 73.38 72.87 71.19 -39.30 63.04 -50.85 -49.79 -53.11 52.48 -50.76 -50.23 -50.44 -66.61 -53.91 -53.26 -48.63

The cash conversion cycle of Arrow Electronics Inc has shown fluctuations over the past few quarters. From March 31, 2020, to December 31, 2021, the company maintained negative cash conversion cycle days, indicating efficient management of cash flow from suppliers to customers. However, by December 31, 2021, the cash conversion cycle days turned positive, indicating a potential delay in converting inventory into cash or a lengthening of the collection period from customers.

Subsequently, from March 31, 2022, to June 30, 2024, the cash conversion cycle days fluctuated, with some quarters showing negative values and others showing positive values. Notably, the cycle increased significantly by the end of 2024 to 76.42 days, indicating a prolonged time taken by the company to convert inventory into cash and collect receivables from customers.

Overall, the analysis suggests that Arrow Electronics Inc has experienced variations in its cash conversion cycle, with periods of efficient cash management and other periods of potential challenges in converting assets into cash promptly. It would be crucial for the company to closely monitor and manage its working capital components to optimize its cash conversion cycle and maintain healthy liquidity levels in the future.