Cabot Corporation (CBT)
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 | 2.04 | 1.98 | 2.17 | 1.93 | 1.83 | 1.65 | 1.70 | 1.26 | 1.21 | 1.24 | 1.95 | 1.89 | 1.97 | 1.85 | 1.99 | 2.08 | 2.08 | 2.02 | 2.07 | 1.34 |
| Quick ratio | 1.17 | 1.14 | 1.23 | 1.08 | 0.98 | 0.94 | 0.99 | 0.71 | 0.63 | 0.71 | 1.14 | 1.12 | 1.16 | 1.08 | 1.06 | 1.07 | 1.15 | 1.17 | 1.18 | 0.65 |
| Cash ratio | 0.29 | 0.29 | 0.30 | 0.23 | 0.19 | 0.19 | 0.19 | 0.15 | 0.13 | 0.15 | 0.25 | 0.23 | 0.26 | 0.29 | 0.33 | 0.25 | 0.30 | 0.28 | 0.23 | 0.16 |
Cabot Corp.'s liquidity ratios have shown overall improvement over recent quarters. The current ratio has generally increased, indicating the company's ability to meet its short-term obligations with its current assets. However, there was a slight decrease in Q4 2023 compared to Q3 2023.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also improved steadily over the quarters. This suggests that Cabot Corp. has a sufficient level of liquid assets to cover its short-term liabilities without relying on inventory sales.
The cash ratio, reflecting the company's ability to pay off its current liabilities using only its cash and cash equivalents, has shown a consistent upward trend. This indicates that Cabot Corp. has been increasing its cash reserves relative to its current liabilities, which is a positive sign for the company's short-term financial stability.
Overall, Cabot Corp.'s liquidity ratios demonstrate a generally healthy liquidity position, with improvements in the company's ability to meet its short-term obligations using various levels of current assets. However, it is important for the company to sustain or further enhance these ratios to ensure continued financial stability and flexibility.
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 | 141.42 | 81.88 | 128.19 | 132.57 | 140.33 | 84.53 | 151.86 | 149.92 | 136.84 | 75.07 | 146.90 | 150.25 | 141.80 | 65.79 | 111.30 | 123.43 | 122.27 | 68.43 | 138.13 | 137.40 |
The cash conversion cycle measures how efficiently a company manages its working capital and indicates the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. In the case of Cabot Corp., the trend of its cash conversion cycle over the past eight quarters shows some fluctuations.
The highest cash conversion cycle was observed in Q3 2022 at 151.86 days, indicating that it took the company a relatively long time to convert its investments into cash during that period. Subsequently, there was a notable improvement in Q4 2022, with the cycle decreasing to 84.53 days, suggesting more efficient working capital management.
In Q1 2023, there was a slight increase in the cash conversion cycle to 140.33 days, followed by a substantial decrease in Q2 2023 to 132.57 days. This improvement was sustained in Q3 2023, with a cycle of 128.19 days. However, in Q4 2023, there was a significant reduction to 81.88 days, indicating that the company was able to convert its investments into cash more quickly during that period.
The most recent data for Q1 2024 shows a slight increase in the cash conversion cycle to 141.42 days compared to the previous quarter. This rise suggests that Cabot Corp. may have faced challenges in managing its working capital efficiently during Q1 2024.
Overall, while there have been fluctuations in Cabot Corp.'s cash conversion cycle over the past eight quarters, the company has demonstrated improvements in working capital management, as evidenced by the notable decreases in the cycle duration in some quarters. Continued monitoring and analysis of the cash conversion cycle will be essential to assess the company's ongoing efficiency in converting investments into cash flows.