Dream Finders Homes Inc (DFH)
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 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.77 | 2.19 | 2.48 | 3.28 | 2.82 | 1.72 | 1.53 | 1.59 | 1.53 | 1.53 | 1.57 | 1.70 | 1.71 | 1.75 | 1.85 |
| Quick ratio | 0.18 | 0.31 | 0.34 | 0.93 | 0.59 | 0.33 | 0.29 | 0.39 | 0.14 | 0.11 | 0.15 | 0.30 | 0.21 | 0.09 | 0.22 |
| Cash ratio | 0.18 | 0.31 | 0.34 | 0.93 | 0.59 | 0.33 | 0.29 | 0.39 | 0.14 | 0.11 | 0.15 | 0.30 | 0.21 | 0.09 | 0.22 |
Dream Finders Homes Inc's liquidity ratios have shown some fluctuations over the past few quarters. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has ranged from 1.53 to 3.28 over the period. The ratio peaked at 3.28 in December 2023 and hit a low of 1.53 in multiple quarters.
In contrast, the quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Dream Finders Homes Inc's quick ratio has varied from 0.11 to 0.93, indicating fluctuations in the company's ability to meet its short-term obligations without relying on inventory.
Similarly, the cash ratio, which specifically assesses the company's ability to cover its current liabilities with cash and cash equivalents, has shown fluctuations ranging from 0.09 to 0.93. This ratio reached a peak of 0.93 in December 2023 and hit a low of 0.09 in September 2022.
Overall, these liquidity ratios suggest that while Dream Finders Homes Inc has generally maintained a comfortable level of liquidity to meet its short-term obligations, there have been some periods of lower liquidity, particularly in the quick and cash ratios. It is important for the company to monitor and manage its liquidity effectively to ensure it can meet its financial obligations in a timely manner.
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 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 fluctuated over the past few quarters. The company's cash conversion cycle, a measure of how quickly a company can convert its inventory and accounts receivable into cash, has ranged from as low as 147.35 days to as high as 266.26 days.
The trend indicates that the company's efficiency in managing its working capital has improved in recent quarters, as the cash conversion cycle decreased from 241.77 days in December 2021 to 182.26 days in March 2024. This suggests that Dream Finders Homes Inc has been able to more effectively manage its inventory and collect accounts receivable, leading to a shorter cycle and quicker conversion of assets into cash.
However, it is worth noting that the cash conversion cycle increased in the most recent quarter to 266.26 days, which may indicate potential challenges in managing working capital efficiency. It would be important for the company to closely monitor and address any factors contributing to this increase in order to maintain a healthy cash conversion cycle.
Overall, a lower cash conversion cycle is generally favorable as it signifies that the company is able to generate cash more quickly from its operating activities. Dream Finders Homes Inc should continue to focus on optimizing its working capital management to ensure efficient operations and sustained financial performance.