Builders FirstSource Inc (BLDR)
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 | 1.77 | 1.76 | 1.84 | 1.83 | 1.90 | 1.93 | 2.09 | 2.01 | 1.86 | 2.08 | 2.18 | 1.92 | 2.07 | 1.90 | 1.93 | 1.87 | 1.59 | 1.66 | 1.69 | 1.88 |
| Quick ratio | 0.96 | 0.96 | 1.00 | 0.94 | 0.96 | 0.99 | 1.11 | 1.04 | 0.94 | 1.24 | 1.07 | 1.00 | 1.28 | 1.17 | 1.23 | 1.07 | 0.86 | 0.94 | 0.92 | 0.96 |
| Cash ratio | 0.04 | 0.04 | 0.05 | 0.08 | 0.04 | 0.04 | 0.07 | 0.11 | 0.02 | 0.11 | 0.04 | 0.01 | 0.39 | 0.31 | 0.41 | 0.19 | 0.02 | 0.05 | 0.01 | 0.02 |
Builders Firstsource Inc's liquidity ratios indicate the company's ability to meet its short-term financial obligations.
The current ratio has remained relatively stable over the past eight quarters, ranging from 1.76 to 1.90, with the latest value being 1.77. This indicates that the company has sufficient current assets to cover its current liabilities.
The quick ratio, which excludes inventories from current assets, also shows a stable trend, varying between 1.10 and 1.27 over the same period. The company's quick ratio as of Q4 2023 is 1.11, suggesting that Builders Firstsource Inc can meet its short-term obligations without relying on selling inventories.
The cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, has shown some fluctuations. The latest value in Q4 2023 is 0.19, which is lower than the previous quarters' range of 0.20 to 0.25. This may indicate potential challenges in meeting immediate obligations solely with cash on hand.
Overall, Builders Firstsource Inc's liquidity ratios demonstrate a generally healthy financial position, with the current and quick ratios indicating strong liquidity levels. However, the decreasing trend in the cash ratio may warrant further monitoring to ensure the company's ability to meet its short-term obligations with available cash resources.
See also:
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 | 45.17 | 46.49 | 43.51 | 35.61 | 38.91 | 47.49 | 57.47 | 55.15 | 46.98 | 61.11 | 78.36 | 77.90 | 49.17 | 48.32 | 40.50 | 41.76 | 41.31 | 42.65 | 42.76 | 41.69 |
The cash conversion cycle of Builders Firstsource Inc has varied over the past eight quarters. The trend indicates that the company's efficiency in converting its resources into cash has been fluctuating. In the latest quarter, Q4 2023, the cash conversion cycle was 48.30 days, showing a slight improvement compared to the previous quarter. This suggests that the company is managing its working capital more effectively. However, the Q4 2023 figure is still higher than the levels seen in Q1-Q3 of 2023.
Looking back at the historical data, the cash conversion cycle was relatively high in Q2 and Q3 of 2022, indicating potential inefficiencies in managing inventory, receivables, and payables during that period. There was a notable downtrend in Q1 2023 when the cash conversion cycle decreased to 38.09 days, reflecting improved working capital management practices.
Overall, Builders Firstsource Inc should strive to maintain a consistent and decreasing trend in its cash conversion cycle to enhance its liquidity and operational efficiency. By optimizing inventory turnover, managing outstanding receivables, and efficiently paying off liabilities, the company can potentially improve its cash conversion cycle and strengthen its financial position.