Armstrong World Industries Inc (AWI)

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 1.61 1.88 2.05 2.18 1.95 1.66 1.66 1.65 1.54 1.60 1.79 2.02 1.81 2.44 2.04 2.03 1.57 2.09 1.20 1.27
Quick ratio 0.93 1.17 1.27 1.35 1.22 0.97 1.01 0.99 0.99 1.29 1.47 1.66 1.49 2.06 1.43 1.44 0.84 1.31 0.58 0.61
Cash ratio 0.36 0.54 0.61 0.62 0.60 0.41 0.38 0.39 0.47 0.76 0.95 1.07 1.03 1.38 0.75 0.87 0.29 0.69 0.41 0.46

Armstrong World Industries Inc.'s liquidity ratios over the past eight quarters show fluctuations in its ability to meet short-term obligations.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been generally healthy, ranging from 1.61 to 2.18. This suggests that Armstrong World Industries Inc. has sufficient current assets to meet its current liabilities. However, the ratio decreased from Q1 2023 to Q4 2023, indicating a potential decrease in short-term liquidity.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also demonstrated a generally stable trend, ranging from 1.04 to 1.47. This indicates that the company can cover its short-term liabilities using its most liquid assets. Similarly to the current ratio, the quick ratio decreased from Q1 2023 to Q4 2023.

The cash ratio, which reflects the company's ability to cover its current liabilities with its cash and cash equivalents, shows a slightly different pattern. The ratios have fluctuated between 0.47 and 0.73, with the lowest value in Q1 2022 and the highest in Q1 2023. This metric suggests that Armstrong World Industries Inc. relies less on cash to cover its short-term obligations compared to its other current assets.

In conclusion, while Armstrong World Industries Inc. has generally maintained healthy liquidity ratios, the decreasing trend in both the current and quick ratios from Q1 2023 to Q4 2023 may indicate a potential liquidity challenge that warrants further monitoring and analysis.

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 29.01 30.27 31.05 34.94 28.90 32.47 34.35 33.43 26.52 28.50 27.33 32.65 25.82 33.37 40.36 31.67 23.16 28.30 32.62 24.21

The cash conversion cycle of Armstrong World Industries Inc. has shown some fluctuations over the past eight quarters. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

In Q4 2023, the company had a cash conversion cycle of 79.06 days, which improved from the previous quarter (Q3 2023) where it was 82.66 days. This indicates that the company was able to more efficiently manage its working capital and turn its resources into cash during this period.

Looking at the trend over the past year, it is evident that the cash conversion cycle peaked in Q3 2022 at 92.55 days and has since been on a downward trajectory. This downward trend suggests that Armstrong World Industries Inc. has been streamlining its operations and improving its cash conversion efficiency.

However, it is worth noting that in Q1 2023 the cash conversion cycle increased to 87.01 days, reflecting a temporary setback in the company's working capital management.

Overall, Armstrong World Industries Inc. has shown a mix of improvements and fluctuations in its cash conversion cycle over the past eight quarters. Monitoring and managing this cycle effectively is crucial for the company to ensure optimal utilization of its resources and maintain healthy cash flows.