Century Communities Inc (CCS)

Century Communities Inc has demonstrated consistently strong liquidity levels over the past five years based on its liquidity ratios.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, has been increasing steadily from 6.89 in 2019 to 9.80 in 2023. This indicates that Century Communities Inc has more than enough current assets to cover its current liabilities, providing a cushion to meet its obligations.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also shown an upward trend over the years, from 1.05 in 2019 to 2.02 in 2023. This implies that the company has a good ability to cover its short-term liabilities without relying on selling inventory, which is a positive sign of financial health.

The cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) in relation to current liabilities, has also exhibited a consistent improvement from 0.97 in 2019 to 1.83 in 2023. This suggests that Century Communities Inc has a solid cash position relative to its short-term obligations, enhancing its ability to meet immediate payment needs.

Overall, the liquidity ratios of Century Communities Inc indicate a robust financial position with ample liquidity to meet its short-term obligations, reflecting positively on the company's operational efficiency and financial management.

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Additional liquidity measure

The cash conversion cycle of Century Communities Inc has shown fluctuations over the past five years. The cycle indicates the number of days it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

In 2023, the cash conversion cycle increased to 370.02 days, indicating a longer period for the company to convert its investments into cash. This may suggest potential inefficiencies in managing inventory, collecting receivables, or converting sales into cash.

In 2022 and 2021, the cash conversion cycle decreased to 299.25 days and 276.92 days, respectively, showing improvements in the company's working capital management. A shorter cash conversion cycle implies quicker conversion of resources into cash, which can be a positive indicator of operational efficiency.

In 2020, the cash conversion cycle increased to 263.83 days from the improvement seen in the previous year. This increase may signal challenges in managing working capital or changes in the company's operating cycle.

In 2019, the cash conversion cycle was relatively high at 339.10 days, indicating a longer conversion period compared to the subsequent years. This may have been influenced by various factors impacting the company's operational performance during that period.

Overall, fluctuations in Century Communities Inc's cash conversion cycle indicate varying levels of efficiency in managing working capital and operational processes over the past five years. Monitoring and analyzing changes in the cash conversion cycle can provide insights into the company's liquidity, efficiency, and potential areas for improvement in its cash flow management.