Chemed Corp (CHE)

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 1.61 1.33 1.11 0.93 0.92 0.67 0.71 0.66 0.76 0.70 1.01 1.20 1.10 0.82 0.59 0.81 0.73 0.67 0.81 0.73
Quick ratio 1.43 1.15 0.93 0.75 0.72 0.43 0.51 0.48 0.56 0.51 1.17 1.41 1.26 0.94 0.48 0.66 0.57 0.49 0.62 0.59
Cash ratio 0.85 0.58 0.53 0.20 0.25 0.03 0.03 0.06 0.11 0.10 0.71 1.05 0.84 0.61 0.06 0.12 0.02 0.04 0.01 0.04

Chemed Corp.'s liquidity ratios have shown varying trends over the past eight quarters. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has generally been increasing since Q1 2022, reaching a high of 1.61 in Q4 2023. This indicates that the company has improved its liquidity position.

Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also been on an upward trend, reaching 1.57 in Q4 2023. This shows that Chemed Corp. has a good ability to meet its short-term obligations without relying on inventory to do so.

On the other hand, the cash ratio, which provides insight into the company's ability to cover its current liabilities with its cash and cash equivalents, has been more volatile. While it improved in Q4 2023 to 0.98, it had dropped significantly in Q1 2023 to 0.34 before recovering. This suggests that Chemed Corp. may have experienced fluctuations in its cash position over this period.

Overall, the upward trends in both the current and quick ratios indicate an improving liquidity position for Chemed Corp., although the fluctuations in the cash ratio suggest some variability in the company's cash management. It would be important for stakeholders to monitor these ratios closely to ensure continued liquidity stability.

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 19.11 18.92 14.21 19.87 17.20 6.70 9.85 8.63 10.26 9.40 11.01 8.00 12.25 12.82 17.64 17.95 17.32 13.82 16.46 16.16

The cash conversion cycle for Chemed Corp. has shown fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle stood at 16.30 days, slightly lower than in Q3 2023 at 16.54 days. However, it was higher compared to Q2 2023 and Q4 2022 when it was 12.64 days and 15.41 days, respectively.

A longer cash conversion cycle indicates that the company takes more time to convert its inventory and accounts receivable into cash, potentially facing liquidity challenges. On the contrary, a shorter cycle suggests that the company efficiently manages its working capital.

It is noteworthy that in Q3 2022, the cash conversion cycle spiked significantly to 24.19 days, indicating possible issues with managing inventory, receivables, and payables during that period.

Overall, the trend in Chemed Corp.'s cash conversion cycle indicates some variability in its working capital management efficiency over the past eight quarters, which merits further investigation to understand the underlying reasons behind these fluctuations.