Builders FirstSource Inc (BLDR)
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 | 1.77 | 1.77 | 1.83 | 2.21 | 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 |
| Quick ratio | 0.09 | 0.17 | 0.04 | 0.39 | 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 |
| Cash ratio | 0.09 | 0.17 | 0.04 | 0.39 | 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 |
Builders FirstSource Inc's liquidity ratios have shown fluctuating performance over the past few years.
The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has varied between 1.76 and 2.21 during the period. Generally, a current ratio above 1 indicates that the company can meet its short-term obligations. The current ratio peaked at 2.21 on March 31, 2024, signaling a strong ability to cover its current liabilities with current assets. However, the ratio dipped to 1.76 on September 30, 2023, which may raise concerns about the company's short-term liquidity position.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventories from current assets, has fluctuated between 0.01 and 0.41 over the period. A quick ratio above 1 is typically considered healthy, indicating that the company can meet its short-term liabilities without relying on selling inventory. The quick ratio peaked at 0.41 on June 30, 2020, and December 31, 2024, showing an improvement in liquidity position during those periods.
The cash ratio, similar to the quick ratio, also excludes inventories from current assets but considers only cash and cash equivalents. This ratio has mirrored the trends in the quick ratio, with values ranging from 0.01 to 0.39. A cash ratio of 0.39 on March 31, 2024, indicates that the company had a higher level of cash to cover its short-term obligations.
Overall, while the company has experienced fluctuations in its liquidity ratios, with some periods showing stronger liquidity positions than others, it is essential to monitor these ratios consistently to ensure the company's ability to meet its short-term financial obligations.
See also:
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 | 40.17 | 39.53 | 41.94 | 44.36 | 40.44 | 43.12 | 41.21 | 35.74 | 34.75 | 42.07 | 49.25 | 54.01 | 42.27 | 46.26 | 70.87 | 71.28 | 45.19 | 47.58 | 41.00 | 42.98 |
Builders FirstSource Inc has shown fluctuations in its cash conversion cycle over the periods analyzed. The cash conversion cycle represents the time it takes for the company to convert its investments in inventory and other resources back into cash flows from sales.
From March 31, 2020, to June 30, 2020, there was a slight improvement in the cash conversion cycle, indicating better management of inventory and receivables. However, from June 2020 to March 2021, there was a significant increase in the cycle, suggesting potential challenges in managing working capital efficiently during that period.
Subsequently, there were fluctuations in the cash conversion cycle for the remainder of 2021 and 2022. Overall, there were some improvements in efficiency as the cycle decreased, particularly notable in December 2022.
From 2023 to 2024, the cash conversion cycle remained relatively stable within a certain range, indicating a consistent approach to managing working capital during these periods.
The company's ability to effectively manage its cash conversion cycle is crucial in ensuring liquidity and optimizing its overall financial performance. Further analysis could be done to investigate the factors driving these fluctuations and to determine if there are areas for operational improvement.