Emerson Electric Company (EMR)

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 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 1.19 1.18 1.07
Quick ratio 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 0.75 0.72 0.64
Cash ratio 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 0.25 0.26 0.21

Emerson Electric Co.'s liquidity ratios have been fluctuating over the past eight quarters, as depicted in the table.

The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has varied significantly, ranging from a low of 1.06 in Q3 2022 to a high of 2.75 in Q4 2023. This ratio indicates that the company may have faced liquidity challenges in Q1 2024 with a ratio of 1.12, as it had slightly more current assets than current liabilities. A higher current ratio suggests a stronger liquidity position.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also shows fluctuations. Emerson Electric Co. had a low quick ratio of 0.71 in Q1 2023, indicating potential difficulty in meeting immediate obligations without relying on selling inventory. The highest quick ratio of 2.35 in Q4 2023 suggests a more comfortable liquidity position during that period.

The cash ratio, which provides the most conservative liquidity measure by only considering cash and cash equivalents, also fluctuated for Emerson Electric Co. over the quarters. The company had a low cash ratio of 0.43 in both Q2 2022 and Q1 2023, implying a limited ability to cover short-term liabilities solely with cash. The highest cash ratio of 1.85 was observed in Q4 2023, indicating an improved liquidity position with a greater proportion of cash reserves.

Overall, Emerson Electric Co.'s liquidity ratios show varying trends, reflecting changes in the company's ability to meet its short-term obligations and the composition of its current assets. It is important for investors and stakeholders to monitor these ratios closely to assess the company's liquidity risk and financial health.

See also:

Emerson Electric Company Liquidity Ratios (Quarterly Data)

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 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 59.45 64.42 67.07

The cash conversion cycle of Emerson Electric Co. has shown variability over the past eight quarters. Starting from Q2 2022 when it stood at 65.14 days, the cycle increased steadily to reach 116.72 days in Q1 2024. This indicates that the company has been taking longer to convert its investments in inventory and other resources into cash receipts from customers.

The lengthening of the cash conversion cycle suggests that Emerson Electric Co. may be facing challenges in efficiently managing its working capital, which could lead to increased financing costs and reduced liquidity. It is important for the company to closely monitor and potentially optimize its inventory turnover, accounts receivable collection, and accounts payable to shorten the cash conversion cycle and improve overall financial health.