Emerson Electric Company (EMR)
Liquidity ratios
| 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.77 | 1.16 | 1.18 | 1.12 | 2.75 | 2.38 | 1.19 | 1.10 | 1.09 | 1.06 | 1.68 | 2.04 | 1.35 | 1.31 | 1.26 | 1.20 | 1.52 | 1.32 | 1.01 | 1.14 |
| Quick ratio | 1.23 | 0.73 | 0.75 | 0.70 | 2.21 | 1.98 | 0.66 | 0.61 | 0.67 | 0.68 | 1.22 | 1.40 | 0.85 | 0.84 | 0.81 | 0.76 | 1.06 | 0.83 | 0.66 | 0.69 |
| Cash ratio | 0.62 | 0.30 | 0.30 | 0.27 | 1.60 | 1.52 | 0.29 | 0.28 | 0.23 | 0.29 | 0.86 | 0.89 | 0.38 | 0.43 | 0.37 | 0.34 | 0.57 | 0.41 | 0.33 | 0.26 |
Emerson Electric Company's liquidity ratios have displayed some fluctuations over the past few quarters. The current ratio, which measures the company's ability to cover its current liabilities with its current assets, has ranged from 1.01 to 2.75. It peaked at 2.75 in Q3 2023 but has since ranged between 1.06 and 1.77, indicating a relatively healthy level of liquidity.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has fluctuated between 0.61 and 2.21. While it reached a high of 2.21 in Q3 2023, it has generally trended downwards, ranging from 0.66 to 1.40 in recent quarters.
The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, varied between 0.23 and 1.60. It peaked at 1.60 in Q3 2023 but has since fluctuated between 0.23 and 0.62, indicating a considerable variation in the company's cash position.
Overall, while Emerson Electric Company's liquidity ratios have shown some volatility, the current ratio generally suggests a healthy liquidity position, supported by the company's ability to cover its short-term obligations. However, the downward trend in the quick and cash ratios warrants further monitoring to ensure the company maintains a strong liquidity position in the future.
See also:
Emerson Electric Company Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 91.71 | 96.64 | 102.89 | 109.04 | 95.06 | 90.64 | 79.11 | 72.38 | 74.21 | 71.46 | 65.14 | 59.41 | 58.00 | 59.82 | 64.31 | 65.77 | 66.32 | 70.07 | 66.52 | 63.85 |
The cash conversion cycle of Emerson Electric Company has shown some fluctuations over the past few quarters. The cycle measures the efficiency with which the company is able to convert its resources into cash inflows.
Analyzing the trend, we can see that the cash conversion cycle has been gradually increasing from the end of 2019 until the most recent quarter of September 2024. This indicates that there has been a lengthening of the time it takes for Emerson Electric Company to convert its investments in inventory and receivables back into cash.
A longer cash conversion cycle could potentially signal inefficiencies in managing inventory, slow collection of accounts receivable, or delays in paying suppliers. It is important for the company to focus on optimizing these areas to improve its cash conversion cycle and ensure healthy cash flows.
Overall, the trend in Emerson Electric Company's cash conversion cycle warrants further investigation into its working capital management practices to identify opportunities for improvement in efficiency and liquidity.