BWX Technologies Inc (BWXT)

BWX Technologies Inc's liquidity ratios indicate the company's ability to meet short-term obligations with available assets:

1. Current Ratio: The current ratio has shown an increasing trend over the years, reflecting improving liquidity. The ratio stood at 1.46 in 2020 and steadily rose to 2.18 by the end of 2023, before slightly declining to 1.96 in 2024. Overall, the current ratio indicates that BWX Technologies Inc has sufficient current assets to cover its current liabilities.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, measures the company's ability to meet short-term obligations with its most liquid assets. Although the quick ratio fluctuated over the years, it generally remained below 1.0, indicating that a significant portion of BWX Technologies Inc's current liabilities cannot be covered by its most liquid assets.

3. Cash Ratio: The cash ratio measures a company's ability to cover its short-term liabilities with cash and cash equivalents. BWX Technologies Inc's cash ratio ranged from 0.08 to 0.20 during the years analyzed, indicating that the company holds an adequate amount of cash to cover its short-term obligations, with a gradual increase from 2020 to 2023.

In summary, while BWX Technologies Inc's current ratio suggests sound liquidity and an increasing ability to cover short-term obligations with current assets, the quick and cash ratios indicate that the company may rely more on non-cash current assets or needs to manage its liquid assets more effectively to improve its ability to meet immediate financial commitments.

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Additional liquidity measure

The cash conversion cycle of BWX Technologies Inc has shown fluctuating trends over the past five years.

At the end of December 31, 2020, the company had a negative cash conversion cycle of -13.19 days, indicating that it was able to convert its inventory into cash quickly and efficiently, resulting in a negative working capital requirement.

By December 31, 2021, the cash conversion cycle further decreased to -27.93 days, suggesting that the company was managing its cash conversion even more effectively than the previous year. This could indicate efficient management of inventory, accounts receivable, and accounts payable.

However, by the end of December 31, 2022, the cash conversion cycle slightly increased to -12.50 days, which might indicate that the company's efficiency in managing working capital had slightly declined compared to the previous year.

As of December 31, 2023, the cash conversion cycle continued to decrease to -6.42 days, showing that the company was able to further optimize its working capital management, resulting in a shorter cash conversion cycle.

Finally, as of December 31, 2024, the cash conversion cycle reached its lowest point at -0.40 days. This extremely low value suggests that BWX Technologies Inc was able to convert its inventory, receivables, and payables into cash almost instantaneously, showcasing exceptional efficiency in working capital management.

Overall, the trend in cash conversion cycle for BWX Technologies Inc fluctuated over the years but remained largely negative, indicating effective management of working capital and the ability to efficiently convert assets into cash.