Curtiss-Wright Corporation (CW)

Curtiss-Wright Corporation's liquidity ratios demonstrate a generally improving trend over the years, indicating the company's ability to meet its short-term obligations and maintain financial flexibility.

1. Current Ratio: The current ratio, which measures a company's ability to cover its short-term liabilities with its current assets, increased from 1.61 in 2020 to 2.13 in 2023 before slightly declining to 1.69 in 2024. This indicates that the company had more than enough current assets to cover its current liabilities, with a peak in 2023.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Curtiss-Wright Corporation's quick ratio improved from 0.97 in 2020 to 1.41 in 2023, signifying a stronger ability to meet short-term obligations without relying on inventory. The ratio then held steady at 1.11 in 2024.

3. Cash Ratio: The cash ratio, which focuses solely on the most liquid current assets, increased from 0.24 in 2020 to 0.50 in 2023, indicating the company's enhanced ability to cover current liabilities with cash on hand. However, the ratio decreased to 0.35 in 2024, suggesting a slightly lower cash reserve relative to current liabilities.

Overall, Curtiss-Wright Corporation's liquidity ratios depict a company with sound liquidity positions, especially highlighted by the upward trend in the current and quick ratios, showing an improvement in its ability to meet short-term obligations efficiently. The cash ratio also portrays a healthy level of cash reserves relative to current liabilities, although there was a slight dip in 2024.

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Additional liquidity measure

Curtiss-Wright Corporation's cash conversion cycle has shown fluctuations over the past five years.

On December 31, 2020, the company had a cash conversion cycle of 143.46 days, indicating that it took approximately this many days for the company to convert its investments in inventory and other resources into cash from sales.

By December 31, 2021, the cash conversion cycle had decreased to 129.80 days, reflecting an improvement in this efficiency metric, as the company was able to shorten the time it took to generate cash from its operating activities.

However, by December 31, 2022, the cash conversion cycle increased to 141.78 days, suggesting that the company may have faced challenges in managing its working capital efficiently during that period.

Subsequently, by December 31, 2023, there was a slight improvement as the cash conversion cycle decreased to 136.25 days, indicating that the company was able to streamline its operations to some extent.

As of December 31, 2024, the cash conversion cycle stood at 138.82 days, showing a relatively stable trend compared to the previous year.

Overall, while the company has experienced fluctuations in its cash conversion cycle over the past five years, it is essential for Curtiss-Wright Corporation to focus on optimizing its working capital management to ensure efficient operations and cash flow generation in the future.