Dream Finders Homes Inc (DFH)
Liquidity ratios
| Dec 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.78 | 1.77 | 2.19 | 2.48 | 3.28 | 2.82 | 1.72 | 1.53 | 1.59 | 1.53 | 1.53 | 1.57 | 1.70 |
| Quick ratio | 0.28 | 0.18 | 0.31 | 0.34 | 0.93 | 0.59 | 0.33 | 0.29 | 0.39 | 0.14 | 0.11 | 0.15 | 0.30 |
| Cash ratio | 0.28 | 0.18 | 0.31 | 0.34 | 0.93 | 0.59 | 0.33 | 0.29 | 0.39 | 0.14 | 0.11 | 0.15 | 0.30 |
Dream Finders Homes Inc's liquidity ratios show mixed trends over the period from December 31, 2021, to December 31, 2024.
1. Current Ratio:
- The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has generally fluctuated but trended upwards towards the end of the period.
- It increased from 1.70 on December 31, 2021, to 3.28 on December 31, 2023, indicating improved liquidity.
- However, there was a slight decline to 1.78 on December 31, 2024, which is still higher than the ratio at the beginning of the period.
2. Quick Ratio:
- The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, shows more volatility compared to the current ratio.
- It ranged from a low of 0.11 on June 30, 2022, to a high of 0.93 on December 31, 2023.
- The quick ratio decreased to 0.28 on December 31, 2024, which is relatively lower compared to earlier periods.
3. Cash Ratio:
- The cash ratio, which is the most conservative measure of liquidity focusing solely on cash and cash equivalents, follows a similar trend as the quick ratio.
- It varied from 0.11 on June 30, 2022, to 0.93 on December 31, 2023, then decreased to 0.28 on December 31, 2024.
In conclusion, Dream Finders Homes Inc's liquidity position improved significantly in the mid-years but declined slightly by the end of the period. The company should continue to monitor its liquidity ratios to ensure it can meet its short-term obligations efficiently.
Additional liquidity measure
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 309.64 | 266.26 | 194.17 | 182.26 | 151.70 | 149.22 | 150.09 | 147.35 | 157.57 | 198.08 | 209.03 | 218.45 | 241.77 |
The cash conversion cycle of Dream Finders Homes Inc has shown fluctuations over the years. It is a measure that indicates the time it takes for a company to convert its investment in inventory and other resources into cash flows from sales.
From December 31, 2021, to September 30, 2022, the cash conversion cycle decreased steadily from 241.77 days to 198.08 days. This improvement suggests that the company was able to manage its inventory, receivables, and payables more efficiently during this period.
However, from December 31, 2022, to March 31, 2024, the cash conversion cycle increased, peaking at 309.64 days on December 31, 2024. This significant increase indicates that the company might have faced challenges in managing its working capital effectively, leading to longer cash conversion cycles.
Overall, the fluctuations in the cash conversion cycle of Dream Finders Homes Inc reflect changes in inventory management, collection activities, and payment practices over the years. Monitoring and managing the cash conversion cycle is crucial for ensuring the company's liquidity and operational efficiency.