EMCOR Group Inc (EME)
Liquidity ratios
| Dec 31, 2024 | 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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.30 | 1.28 | 1.29 | 1.31 | 1.26 | 1.26 | 1.29 | 1.34 | 1.26 | 1.28 | 1.30 | 1.40 | 1.44 | 1.43 | 1.45 | 1.48 | 1.44 | 1.46 | 1.48 | 1.50 |
| Quick ratio | 0.32 | 0.26 | 0.22 | 0.25 | 0.22 | 0.16 | 0.17 | 0.16 | 0.17 | 0.15 | 0.11 | 0.22 | 0.35 | 0.30 | 0.31 | 0.36 | 0.42 | 0.34 | 0.27 | 0.19 |
| Cash ratio | 0.32 | 0.26 | 0.22 | 0.25 | 0.22 | 0.16 | 0.17 | 0.16 | 0.17 | 0.15 | 0.11 | 0.22 | 0.35 | 0.30 | 0.31 | 0.36 | 0.42 | 0.34 | 0.27 | 0.19 |
The liquidity ratios of EMCOR Group Inc show a stable trend over the past few years. The current ratio, which measures the company's ability to cover short-term obligations with current assets, has been consistently above 1, indicating that EMCOR Group Inc has had more than enough current assets to cover its short-term liabilities.
The quick ratio, also known as the acid-test ratio, measures the company's ability to quickly cover its short-term liabilities with its most liquid assets. While the quick ratio has fluctuated slightly over the years, it generally indicates that EMCOR Group Inc may have some difficulty meeting its short-term obligations without relying on inventory or other less liquid assets.
The cash ratio, which is a more stringent measure of liquidity, compares the company's cash and cash equivalents to its current liabilities. This ratio has also shown some variability but generally suggests that EMCOR Group Inc has a moderate amount of cash on hand relative to its immediate liabilities.
Overall, EMCOR Group Inc appears to maintain a healthy liquidity position, as evidenced by its current ratio consistently above 1 and its quick and cash ratios reflecting a reasonable ability to meet short-term obligations. However, the company should continue to monitor its liquidity closely, especially during periods of economic uncertainty, to ensure it can meet its financial obligations effectively.
Additional liquidity measure
| Dec 31, 2024 | 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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 2.96 | 2.97 | 3.35 | 3.82 | 3.85 | 4.15 | 3.90 | 3.78 | 3.30 | 4.04 | 3.82 | 3.01 | 2.35 | 2.92 | 3.04 | 2.38 | 2.63 | 1.90 | 1.94 | 1.63 |
The cash conversion cycle of EMCOR Group Inc has shown some fluctuations over the periods analyzed. It measures the length of time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, and then back into cash.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 1.63 days to a peak of 4.15 days. The cycle generally increased over time, indicating potential challenges in efficiently managing working capital.
A shorter cash conversion cycle is generally considered favorable as it signifies the company's ability to quickly sell inventory and collect cash. Conversely, a longer cycle may indicate inefficiencies in inventory management, sales, or collection processes.
EMCOR Group Inc should focus on strategies to optimize its cash conversion cycle, such as improving demand forecasting, streamlining inventory management, negotiating better payment terms with suppliers, and enhancing collection practices to ensure a healthy and efficient cash conversion cycle.