Now Inc (DNOW)

Liquidity ratios

	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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Current ratio	2.56	2.44	2.15	2.29	2.32	2.30	2.38	2.39	2.39	2.33	2.44	2.96	3.17	3.33	3.23	2.65	2.69	2.44	2.55	2.64
Quick ratio	1.63	1.39	1.24	1.32	1.39	1.47	1.52	1.61	1.67	1.63	1.65	2.08	2.15	2.04	1.84	1.48	1.40	1.23	1.23	1.26
Cash ratio	0.72	0.46	0.41	0.38	0.48	0.58	0.57	0.74	0.85	0.83	0.86	1.26	1.42	1.23	0.97	0.52	0.46	0.24	0.17	0.18

NOW Inc's liquidity ratios have shown some fluctuations over the past eight quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally remained above 2.0, indicating a healthy liquidity position. The ratio peaked in Q4 2023 at 2.56 and has shown some variability since then, with values ranging from 2.15 to 2.44.

The quick ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets, has exhibited a similar trend but with lower values compared to the current ratio. The quick ratio has varied between 1.30 and 1.68 over the same period.

The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has also fluctuated. While the cash ratio has generally been below 1.0, indicating that NOW Inc relies on sources other than cash to meet its short-term obligations, it reached its highest point in Q1 2022 at 0.78 and its lowest in Q4 2022 at 0.54.

Overall, NOW Inc's liquidity ratios suggest that the company has been managing its short-term obligations well, with the current ratio consistently above 2.0 providing a comfortable buffer. However, the variability in the quick and cash ratios indicates fluctuations in the composition of current assets and underscores the importance of closely monitoring the company's liquidity position.

Additional liquidity measure

		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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash conversion cycle	days	76.20	85.78	78.54	86.10	85.11	78.45	85.57	75.91	72.23	72.09	80.71	79.95	64.42	68.12	68.96	72.19	76.36	88.10	95.43	102.21

The cash conversion cycle for NOW Inc fluctuated over the past eight quarters, ranging from a low of 75.95 days in Q1 2022 to a high of 86.26 days in Q1 2023. Generally, the company took an average of 80.87 days to convert its resources into cash over this period. A lower cash conversion cycle indicates a more efficient management of working capital, implying that NOW Inc is efficiently turning its inventory and receivables into cash. Conversely, a higher cycle suggests potential inefficiencies in managing these resources, leading to longer times between investment and cash recovery. Monitoring and potentially improving the cash conversion cycle can help optimize liquidity and operating efficiency for the company.