CSW Industrials Inc (CSWI)
Liquidity ratios
| Sep 30, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.82 | 2.73 | 2.86 | 2.77 | 2.83 | 2.99 | 2.99 | 2.95 | 2.92 | 2.72 | 2.56 | 2.55 | 2.86 | 2.65 | 2.65 | 2.81 | 3.05 | 2.84 | 2.54 | 2.98 |
| Quick ratio | 2.56 | 1.34 | 1.43 | 1.17 | 1.26 | 1.35 | 1.32 | 1.08 | 1.25 | 1.31 | 1.19 | 1.09 | 1.46 | 1.39 | 1.29 | 1.22 | 2.04 | 1.69 | 1.58 | 1.83 |
| Cash ratio | 1.71 | 0.17 | 0.20 | 0.23 | 0.14 | 0.15 | 0.18 | 0.14 | 0.12 | 0.13 | 0.14 | 0.16 | 0.20 | 0.17 | 0.12 | 0.24 | 0.82 | 0.36 | 0.31 | 0.75 |
CSW Industrials Inc's liquidity ratios show varying trends over the past several quarters. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been healthy and improving, with a value of 3.82 as of September 30, 2024. This indicates that the company has more than enough current assets to cover its current liabilities.
In contrast, the quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, shows greater volatility. While it has improved over time, reaching 2.56 as of September 30, 2024, it is still lower than the current ratio, suggesting that a significant portion of the company's current assets is tied up in inventory. This could potentially impact the company's ability to meet its short-term obligations in situations where inventory cannot be easily converted to cash.
The cash ratio, which indicates the company's ability to cover its current liabilities with its cash and cash equivalents, has also shown improvement, reaching 1.71 as of September 30, 2024. This suggests that the company has a sufficient level of cash on hand to meet its short-term obligations.
Overall, while CSW Industrials Inc's current ratio indicates strong liquidity and ability to meet short-term obligations, the lower quick ratio highlights the importance of efficiently managing inventory to enhance liquidity further. The improving cash ratio is a positive sign, indicating a healthier cash position for the company.
Additional liquidity measure
| Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 122.74 | 119.30 | 122.32 | 110.06 | 118.34 | 124.05 | 127.96 | 136.67 | 145.42 | 154.53 | 145.17 | 122.68 | 132.85 | 140.86 | 162.50 | 156.03 | 104.13 | 111.01 | 111.72 | 99.85 |
The cash conversion cycle of CSW Industrials Inc has shown fluctuations over the reported periods, indicating changes in the efficiency of its working capital management. The cash conversion cycle is a measure of how long it takes for the company to convert its investments in inventory and accounts receivable into cash flows from sales.
From December 2019 to September 2020, the company's cash conversion cycle fluctuated between 99.85 days and 156.03 days, with a noticeable increase towards the latter part of this period. However, there was a significant improvement in the cycle in the following quarters, reaching a low of 104.13 days by December 2020.
Subsequently, from March 2021 to September 2022, the cash conversion cycle increased steadily, peaking at 154.53 days in September 2022. This may indicate potential challenges in managing inventory levels and collection of receivables efficiently during this period.
From December 2022 to September 2024, the cycle continued to fluctuate, with a range between 110.06 days and 145.42 days. The cycle improved in December 2023 but slightly increased again in September 2024.
Overall, the company should focus on optimizing its inventory management, accounts receivable collection, and accounts payable processes to shorten the cash conversion cycle and free up cash for other operational needs or investment opportunities. Further analysis and comparison with industry benchmarks could provide valuable insights for enhancing working capital efficiency and overall financial performance.