Century Communities Inc (CCS)

Century Communities Inc's liquidity ratios have experienced fluctuations over the years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, decreased from 1.69 in 2020 to 0.76 in 2024. This indicates a decline in the company's short-term liquidity position.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, showed a similar trend. It increased from 1.56 in 2020 to 4.13 in 2022 but then decreased to 0.64 in 2024. This suggests that the company may have faced challenges in quickly covering its short-term liabilities without relying on inventory.

The cash ratio, which is the most conservative liquidity ratio focusing solely on cash and cash equivalents, also showed variability. It dropped from 1.55 in 2020 to 0.64 in 2024, indicating a potential decrease in the company's ability to pay off its current liabilities with cash on hand.

Overall, the varying liquidity ratios of Century Communities Inc over the years suggest that the company may have experienced shifts in its ability to meet short-term financial obligations with liquid assets. It is important for stakeholders to closely monitor these ratios to assess the company's financial health and liquidity management.

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Additional liquidity measure

The cash conversion cycle of Century Communities Inc has fluctuated significantly over the years. In December 2020, the company had a relatively efficient cash conversion cycle of 13.02 days, indicating that it was able to convert its investments in inventory and accounts receivable into cash relatively quickly.

However, by December 2021, the cash conversion cycle had increased substantially to 2,343.97 days. This sharp increase suggests that Century Communities Inc faced challenges in managing its working capital effectively, potentially due to increased inventory levels or delayed collections from customers.

Over the following years, the cash conversion cycle remained high, ranging from 2,383.49 days in December 2022 to 2,451.25 days in December 2023, and then slightly decreasing to 2,400.37 days by December 2024. These extended cash conversion cycles indicate persistent issues in the company's liquidity management and efficiency in converting its assets into cash.

Overall, Century Communities Inc's cash conversion cycle data reveals a concerning trend of prolonged periods between investing in working capital and receiving cash inflows, highlighting the need for the company to improve its working capital management practices to enhance liquidity and operational efficiency.