EMCOR Group Inc (EME)

EMCOR Group Inc's liquidity ratios provide insight into its ability to meet short-term financial obligations.

1. Current Ratio: The company's current ratio has remained relatively stable over the years, ranging between 1.26 and 1.44. This indicates that EMCOR Group Inc has sufficient current assets to cover its current liabilities, with a comfortable margin.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, shows a declining trend from 0.42 in 2020 to 0.32 in 2024. This suggests that the company may have more difficulty meeting its short-term obligations without relying on inventory sales or other less liquid assets.

3. Cash Ratio: The cash ratio, which measures the company's ability to cover its current liabilities with cash alone, has also shown a downward trend from 0.42 in 2020 to 0.32 in 2024. This indicates a decrease in the proportion of cash available to cover immediate liabilities.

Overall, while EMCOR Group Inc's current ratio suggests a healthy liquidity position, the decreasing trend in quick and cash ratios over the years may raise concerns about the company's ability to meet short-term obligations without relying on less liquid assets.

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Additional liquidity measure

The cash conversion cycle of EMCOR Group Inc has fluctuated over the past five years. In 2020, the company had a cash conversion cycle of 2.63 days, which decreased to 2.35 days by the end of 2021, indicating an improvement in the efficiency of converting its resources into cash. However, there was a slight increase in the cash conversion cycle to 3.30 days by the end of 2022, followed by a further increase to 3.85 days by the end of 2023. In the most recent year, 2024, the cash conversion cycle decreased to 2.96 days. Overall, EMCOR Group Inc has managed to maintain a relatively efficient cash conversion cycle, with some fluctuations observed in recent years.