Commercial Metals Company (CMC)

The liquidity ratios of Commercial Metals Company show a consistent improvement over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has been gradually increasing from 2.79 in 2021 to 3.94 in 2024. This indicates that the company has a strong ability to meet its current liabilities with its current assets.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also reflects a positive trend from 1.64 in 2021 to 2.42 in 2024. This suggests that the company's immediate liquidity position has improved significantly over the years.

Additionally, the cash ratio, which indicates the proportion of cash and cash equivalents to current liabilities, has also shown a steady improvement, increasing from 0.51 in 2021 to 1.03 in 2024. This implies that the company has increasingly more cash on hand to cover its short-term obligations.

Overall, the liquidity ratios of Commercial Metals Company demonstrate a healthy liquidity position and an improving ability to meet its short-term financial obligations efficiently. This trend suggests that the company's financial health and liquidity management have been strengthening over the years.

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Additional liquidity measure

The cash conversion cycle of Commercial Metals Company has shown some fluctuations over the past five years. In 2024, the company's cash conversion cycle was 84.79 days, indicating that on average, it takes the company approximately 84.79 days to convert its investments in inventory and receivables into cash from sales.

Comparing this to previous years, there was a slight increase from the previous year's cycle of 83.59 days in 2023, but a decrease from the cycle of 89.85 days in 2022. This suggests that in 2024, Commercial Metals Company was slightly more efficient in managing its cash conversion cycle compared to the prior year.

It's worth noting that the cash conversion cycle in 2024 is also lower than the cycles in 2021 and 2020, which were 89.30 days and 85.07 days, respectively. This indicates that the company's cash management improved over the years, with a shorter cash conversion cycle in 2024 compared to those in 2021 and 2020.

Overall, the trend in the cash conversion cycle of Commercial Metals Company shows some variability but generally suggests a more efficient management of working capital and cash flow in recent years.