Builders FirstSource Inc (BLDR)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.77 | 1.90 | 1.86 | 2.07 | 1.59 |
| Quick ratio | 0.96 | 0.96 | 0.94 | 1.28 | 0.86 |
| Cash ratio | 0.04 | 0.04 | 0.02 | 0.39 | 0.02 |
Builders Firstsource Inc's liquidity ratios show a consistent trend over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has decreased slightly from 2.07 in 2020 to 1.77 in 2023. This indicates that the company may have a slightly lower ability to meet its short-term obligations with its current assets.
The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, has also decreased slightly from 1.34 in 2020 to 1.11 in 2023. This indicates that the company's ability to cover its short-term liabilities with its most liquid assets has decreased.
The cash ratio, which measures the company's ability to cover its short-term liabilities with its cash and cash equivalents, has also shown a decreasing trend from 0.45 in 2020 to 0.19 in 2023. This indicates a declining ability to cover short-term obligations solely with cash on hand.
Overall, while Builders Firstsource Inc's liquidity ratios have decreased over the past few years, they still indicate a reasonable level of liquidity. However, a continued downward trend in these ratios may signal potential liquidity challenges for the company in the future.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 45.17 | 38.87 | 46.92 | 49.18 | 41.33 |
The cash conversion cycle of Builders Firstsource Inc has shown some fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 48.30 days from 42.20 days in 2022. This indicates that it took Builders Firstsource Inc an average of 48.30 days to convert its investments in inventory and other resources into cash during 2023.
Comparing the recent year's data to previous years, the cash conversion cycle was highest in 2021 at 49.88 days and lowest in 2019 at 43.28 days. The increase in the cash conversion cycle in 2023 may suggest potential challenges in managing inventory, accounts receivable, and accounts payable efficiently, leading to a longer cash conversion process.
Overall, Builders Firstsource Inc has experienced fluctuations in its cash conversion cycle over the past five years, with 2023 showing a higher cycle compared to the previous year. This could indicate the need for the company to focus on improving inventory management, collection of accounts receivable, and payment of accounts payable to shorten its cash conversion process and enhance liquidity management.