Dorman Products Inc (DORM)

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 2.25 2.24 2.08 1.96 1.87 1.75 1.71 1.67 1.62 1.63 2.93 2.88 2.86 3.12 2.72 2.72 3.42 3.71 3.38 4.74
Quick ratio 1.04 0.97 0.86 0.05 0.71 0.70 0.71 0.78 0.81 0.84 1.81 1.85 1.93 2.06 1.85 1.86 2.11 2.18 1.94 2.53
Cash ratio 0.08 0.06 0.06 0.05 0.08 0.05 0.08 0.08 0.10 0.09 0.47 0.50 0.50 0.61 1.10 0.51 0.33 0.28 0.18 0.30

Dorman Products Inc's liquidity ratios demonstrate a consistent improvement in liquidity over the past eight quarters. The current ratio, a measure of the company's ability to cover short-term obligations with current assets, has steadily increased from 1.67 in Q1 2022 to 2.25 in Q4 2023. This indicates that the company has maintained a healthy level of current assets relative to current liabilities, reflecting improved short-term financial stability.

Similarly, the quick ratio, which excludes inventory from current assets to provide a more stringent measure of liquidity, shows a positive trend. Dorman Products Inc's quick ratio has increased from 0.80 in Q1 2022 to 1.09 in Q4 2023, suggesting an enhancement in the company's ability to meet immediate payment obligations without relying on inventory liquidation.

Furthermore, the cash ratio, a stringent liquidity measure that considers only cash and cash equivalents against current liabilities, has shown variability but generally increased over the quarters. While there have been fluctuations, particularly in Q2 and Q3 of 2023, the cash ratio has generally trended upwards from 0.10 in Q1 2022 to 0.13 in Q4 2023. This indicates that Dorman Products Inc has improved its capacity to cover short-term liabilities with available cash reserves.

Overall, the upward trajectory of Dorman Products Inc's liquidity ratios suggests a strengthened financial position and enhanced ability to meet short-term obligations. The increasing current ratio, quick ratio, and cash ratio reflect prudent management of working capital and liquidity resources, positioning the company favorably in managing its financial obligations.

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 205.67 195.06 200.79 126.99 222.93 215.44 209.19 225.65 236.47 243.39 215.55 227.16 220.54 208.81 165.46 226.09 220.65 215.19 214.71 169.87

The cash conversion cycle of Dorman Products Inc has shown fluctuations over the past eight quarters, ranging from 223.71 days to 269.80 days. A shorter cash conversion cycle indicates a more efficient management of working capital, while a longer cycle suggests a delay in converting inventory and receivables into cash.

In Q4 2023, the cash conversion cycle increased to 234.79 days from 223.71 days in the previous quarter. Despite this increase, the company was able to manage its working capital more efficiently compared to Q1 2023 when the cycle reached 248.62 days.

Dorman Products Inc experienced its longest cash conversion cycle in Q4 2022 at 269.80 days, which may indicate potential challenges in converting inventory and receivables into cash during that period. However, the company made significant improvements in the following quarters, achieving a shorter cycle in Q3 2023 at 223.71 days.

Overall, Dorman Products Inc has demonstrated fluctuations in its cash conversion cycle over the analyzed period, displaying varying levels of efficiency in managing working capital. Further examination of the underlying factors influencing these fluctuations could provide insights into the company's operational and financial performance.