CSW Industrials Inc (CSWI)

CSW Industrials Inc's liquidity ratios show a consistent trend of healthy liquidity over the past five years. The current ratio has fluctuated slightly but generally remained above 2, indicating the company's ability to meet its short-term obligations with its current assets. The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown a similar pattern of remaining above 1, suggesting the company's ability to cover its short-term liabilities without relying on selling inventory.

Furthermore, the cash ratio, which is the most stringent liquidity measure by only considering cash and cash equivalents against current liabilities, has also demonstrated a stable trend above 0.1 over the same period. Although the cash ratio has decreased from 0.31 in 2020 to 0.20 in 2024, it still indicates that CSW Industrials Inc maintains a sufficient level of cash to cover its immediate liabilities.

Overall, the liquidity ratios suggest that CSW Industrials Inc has maintained a strong liquidity position, allowing the company to navigate potential short-term financial challenges effectively.

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Additional liquidity measure

The cash conversion cycle for CSW Industrials Inc has shown a fluctuating trend over the past five years. The cycle was at its lowest point in March 2020, at 111.58 days, indicating that the company was able to convert its investments in inventory and receivables into cash relatively quickly during that period.

However, in the following years, the cash conversion cycle increased, reaching its peak at 153.40 days in March 2021. This longer cycle suggests that the company took more time to convert its investments into cash, potentially indicating inefficiencies in inventory management and collection of receivables.

There was a slight improvement in the cash conversion cycle in the most recent year, with a decrease to 122.22 days in March 2024. Despite this improvement, the company still has room to optimize its cash conversion cycle further to enhance its liquidity and overall financial performance.

Overall, CSW Industrials Inc should focus on strategies to streamline its operating cycle, reduce days in inventory, and accelerate the collection of receivables to improve its cash conversion cycle and strengthen its financial position.