Donaldson Company Inc (DCI)

Liquidity ratios

	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019
Current ratio	1.84	1.91	1.47	1.49	1.70	1.90	2.33	2.35	2.23	2.25	2.06	2.23	2.05	2.18	2.25	2.73	2.70	2.82	2.25	2.18
Quick ratio	1.10	1.17	0.89	0.91	1.04	1.14	1.30	1.31	1.29	1.24	1.13	1.28	1.28	1.38	1.40	1.75	1.70	1.82	1.38	1.34
Cash ratio	0.30	0.30	0.22	0.25	0.25	0.26	0.31	0.28	0.31	0.28	0.27	0.35	0.37	0.39	0.42	0.64	0.58	0.75	0.42	0.40

Donaldson Company Inc's liquidity ratios have shown some fluctuation over the past few periods. The current ratio, which measures short-term liquidity and ability to meet immediate obligations, has exhibited a general declining trend, albeit remaining above 1.5, indicating the company's current assets are sufficient to cover its current liabilities.

The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, has also experienced a downward trend. While remaining above 1, suggesting that the company can cover its short-term liabilities without relying on inventory, the decreasing trend may indicate potential issues with the company's ability to quickly convert assets into cash.

The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, has varied over the periods but generally remains at acceptable levels. This ratio measures the company's ability to cover its short-term liabilities with its most liquid assets, and a higher ratio is generally favorable.

Overall, while Donaldson Company Inc's liquidity ratios have shown some volatility, they generally indicate that the company has a strong liquidity position and is capable of meeting its short-term obligations. However, the declining trend in the current and quick ratios warrants further monitoring to ensure the company's liquidity remains stable in the future.

Additional liquidity measure

		Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019
Cash conversion cycle	days	79.45	77.91	80.12	78.93	82.00	88.53	93.13	89.78	94.78	96.93	92.92	92.06	88.67	92.33	96.20	93.07	93.56	92.13	90.62	90.88

The cash conversion cycle of Donaldson Company Inc has fluctuated over the past 20 quarters, ranging from a low of 77.91 days to a high of 96.93 days. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.

Analyzing the trend, it appears that the cash conversion cycle generally hovers around the 80 to 90 days range, with occasional fluctuations outside this range. A shorter cash conversion cycle is typically favorable as it indicates that the company is efficient in managing its working capital and converting its operational activities into cash quickly.

On the other hand, a longer cash conversion cycle may suggest issues with inventory management, accounts receivable collection, or delays in the payment of accounts payable. It is important for Donaldson Company Inc to closely monitor and actively manage its cash conversion cycle to ensure optimal working capital efficiency and liquidity.

Overall, the fluctuations in the cash conversion cycle of Donaldson Company Inc highlight the importance of continuous monitoring and improvement in working capital management practices to support the company's financial performance and liquidity position.