Carpenter Technology Corporation (CRS)

Liquidity ratios

	Jun 30, 2024	Mar 31, 2024	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
Current ratio	3.41	3.20	2.90	2.95	2.79	2.45	2.51	2.80	2.98	2.21	3.55	3.39	3.65	4.27	4.34	4.49	2.80	2.67	2.72	2.81
Quick ratio	1.63	1.27	1.08	1.18	1.25	0.99	0.90	1.08	1.43	1.15	1.37	1.58	1.95	1.94	1.89	1.77	1.08	0.91	0.82	0.87
Cash ratio	0.43	0.12	0.03	0.04	0.10	0.04	0.04	0.13	0.41	0.62	0.33	0.64	0.94	0.91	1.02	0.83	0.43	0.18	0.06	0.05

The liquidity ratios of Carpenter Technology Corporation show a favorable trend over the periods analyzed. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has consistently improved, reaching 3.41 as of June 30, 2024, indicating a strong liquidity position.

Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown improvement, reaching 1.63 as of June 30, 2024. This indicates that the company has an adequate level of liquid assets to cover its short-term obligations without relying on inventory.

The cash ratio, which reflects the company's ability to cover current liabilities with its cash and cash equivalents, has also shown improvement, reaching 0.43 as of June 30, 2024. While this ratio is relatively low compared to the current and quick ratios, the upward trend is a positive indicator of the company's increasing ability to meet its short-term obligations with its cash resources.

Overall, Carpenter Technology Corporation's liquidity ratios suggest a strong ability to meet its short-term financial commitments and indicate a healthy liquidity position that has been improving over the periods analyzed.

Additional liquidity measure

		Jun 30, 2024	Mar 31, 2024	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
Cash conversion cycle	days	118.04	98.27	92.94	85.20	86.83	126.12	130.00	124.71	126.40	244.17	264.67	170.30	150.48	165.08	132.74	138.49	147.78	169.42	169.58	157.27

The cash conversion cycle of Carpenter Technology Corporation has shown some fluctuations over the past few quarters. This metric, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, is an important indicator of its efficiency in managing working capital.

From December 2019 to March 2020, the cash conversion cycle was relatively stable, ranging around 132-138 days. However, it increased significantly to 244.17 days by June 2022, indicating potential challenges in efficiently managing inventory, accounts receivable, and accounts payable.

Subsequently, there was a marked improvement in the cash conversion cycle, dropping to 85.20 days by September 2023. This substantial decrease suggests that Carpenter Technology Corporation may have implemented more effective strategies to streamline operations and accelerate the conversion of resources into cash.

While there was a slight uptick to 92.94 days by December 2023, followed by further increases in the following quarters, the company should monitor this metric closely to ensure that working capital management remains optimized. Overall, fluctuations in the cash conversion cycle can provide valuable insights into the company's operational efficiency and financial health.