Dow Inc (DOW)
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 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.77 | 1.79 | 1.92 | 1.85 | 1.81 | 1.61 | 1.64 | 1.70 | 1.58 | 1.59 | 1.65 | 1.69 | 1.72 | 1.74 | 1.74 | 1.63 | 1.57 | 1.69 | 1.61 | 1.67 |
| Quick ratio | 1.14 | 1.02 | 1.10 | 1.12 | 1.11 | 0.89 | 0.92 | 1.02 | 0.97 | 0.98 | 1.03 | 1.10 | 1.13 | 1.14 | 1.08 | 1.01 | 0.93 | 1.04 | 0.95 | 1.00 |
| Cash ratio | 0.47 | 0.30 | 0.31 | 0.38 | 0.43 | 0.19 | 0.19 | 0.26 | 0.25 | 0.24 | 0.29 | 0.37 | 0.46 | 0.45 | 0.38 | 0.33 | 0.22 | 0.25 | 0.21 | 0.20 |
The liquidity ratios of Dow Inc over the past eight quarters show consistent performance. The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has been relatively stable, with a range of 1.61 to 1.92. This indicates that Dow Inc has maintained a healthy level of current assets to meet its current liabilities.
The quick ratio, which provides a more conservative measure of short-term liquidity by excluding inventory from current assets, also reflects stable performance, ranging from 0.99 to 1.25. This suggests that Dow Inc has a sufficient level of highly liquid assets to meet its short-term obligations, even when inventory is excluded.
The cash ratio, which indicates the proportion of a company's current assets that are in cash or cash equivalents, has shown a consistent range from 0.29 to 0.51. This demonstrates that Dow Inc has maintained a reasonable level of cash reserves relative to its current liabilities.
Overall, the liquidity ratios of Dow Inc indicate a consistent ability to meet its short-term obligations with ample current assets, including a healthy level of cash reserves. This stability in liquidity ratios reflects positively on the company's ability to manage its short-term financial commitments.
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 51.95 | 57.85 | 59.31 | 55.28 | 48.10 | 52.16 | 56.90 | 56.48 | 55.21 | 63.67 | 68.72 | 69.99 | 67.93 | 70.57 | 72.34 | 74.09 | 66.80 |
The cash conversion cycle of Dow Inc, a measure of how efficiently the company manages its working capital, has shown some fluctuations over the past eight quarters. The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, was highest at 59.46 days in the second quarter of 2023 and lowest at 48.02 days in the fourth quarter of 2022.
The company's cash conversion cycle decreased from the second quarter of 2022 to the fourth quarter of 2022, indicating an improvement in its working capital management. However, the cycle then increased in the first and second quarters of 2023, suggesting a potential slowdown in its ability to convert investments into cash.
Overall, fluctuations in the cash conversion cycle indicate varying levels of efficiency in managing working capital and converting investments into cash. It is essential for Dow Inc to closely monitor and optimize its cash conversion cycle to ensure efficient use of resources and maximize cash flow generation.