ChampionX Corporation (CHX)
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 | 1.82 | 1.87 | 1.82 | 1.75 | 1.74 | 1.85 | 1.95 | 1.85 | 1.82 | 1.87 | 1.97 | 2.06 | 2.03 | 2.15 | 2.25 | 2.54 | 2.47 | 2.57 | 2.63 | 2.53 |
| Quick ratio | 1.05 | 1.01 | 0.96 | 0.94 | 0.99 | 1.00 | 1.04 | 1.00 | 1.04 | 1.12 | 1.19 | 1.25 | 1.22 | 1.20 | 1.18 | 1.37 | 1.28 | 1.34 | 1.40 | 1.35 |
| Cash ratio | 0.37 | 0.36 | 0.32 | 0.29 | 0.29 | 0.24 | 0.22 | 0.21 | 0.31 | 0.34 | 0.35 | 0.41 | 0.32 | 0.30 | 0.25 | 0.27 | 0.18 | 0.20 | 0.12 | 0.13 |
ChampionX Corp.'s liquidity ratios provide insight into the company's ability to meet short-term obligations. The current ratio has shown a slight fluctuation over the past eight quarters, ranging from 1.74 to 1.87. This indicates that the company has generally been able to cover its short-term liabilities with its current assets, although there have been some variations in liquidity levels.
The quick ratio, which excludes inventory from current assets, has also varied but remained relatively stable between 1.02 and 1.13. This implies that ChampionX Corp. can meet its immediate financial obligations without relying on selling inventory. The consistent quick ratio suggests a reasonable level of liquidity management by the company.
The cash ratio, which is the most conservative measure of liquidity, has shown an increase over the quarters, going from 0.29 to 0.46. This indicates that ChampionX Corp. is holding more cash relative to its current liabilities, enhancing its ability to cover short-term obligations using its readily available funds.
Overall, ChampionX Corp. has maintained adequate liquidity levels across the periods analyzed, as indicated by the current, quick, and cash ratios. The company's liquidity position seems to have improved slightly in the most recent quarters, suggesting sound financial management in terms of meeting short-term obligations.
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 | 61.65 | 62.13 | 55.29 | 57.22 | 66.81 | 70.53 | 80.66 | 91.06 | 80.23 | 83.70 | 88.86 | 103.17 | 139.43 | 198.54 | 288.53 | 116.89 | 115.01 | 121.09 | 123.57 | 125.48 |
The cash conversion cycle of ChampionX Corp. has shown fluctuations over the past eight quarters. The trend indicates that the company has been able to manage its cash conversion cycle more efficiently in the recent quarters compared to the previous ones. In Q2 and Q3 of 2023, the cash conversion cycle saw a notable improvement, reaching 55.29 days and 62.13 days respectively. This suggests that the company has been able to reduce the time it takes to convert its investments in inventory into cash receipts from sales.
However, the company experienced the longest cash conversion cycle in Q1 of 2022, with 91.06 days, indicating that ChampionX Corp. took longer to convert its investments in raw materials and work in progress into cash flows from sales during that period. Overall, the recent improvement in the cash conversion cycle suggests that ChampionX Corp. has been effectively managing its working capital and operational efficiency. It will be crucial for the company to sustain this trend to maintain healthy cash flow and financial performance in the future.