Enphase Energy Inc (ENPH)
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 | 4.59 | 3.36 | 3.44 | 3.45 | 3.55 | 3.60 | 3.62 | 3.44 | 3.33 | 4.49 | 4.67 | 5.20 | 1.75 | 3.31 | 3.39 | 3.22 | 2.51 | 2.67 | 2.44 | 1.52 |
| Quick ratio | 4.02 | 3.03 | 3.12 | 3.15 | 3.22 | 3.24 | 3.25 | 3.13 | 3.07 | 4.24 | 4.47 | 5.01 | 1.61 | 3.06 | 3.12 | 2.76 | 1.99 | 2.29 | 2.11 | 1.24 |
| Cash ratio | 3.18 | 2.30 | 2.42 | 2.44 | 2.53 | 2.58 | 2.60 | 2.34 | 2.31 | 3.54 | 3.68 | 4.32 | 1.27 | 2.58 | 2.72 | 2.35 | 1.26 | 1.38 | 1.43 | 0.61 |
Enphase Energy Inc's liquidity ratios have shown consistent stability and strength over the past eight quarters based on the current ratio, quick ratio, and cash ratio. The current ratio, measuring the company's ability to cover its short-term liabilities with its current assets, has exhibited an increasing trend, from 3.55 in Q4 2022 to 4.59 in Q4 2023. This indicates that the company has more than enough current assets to cover its current liabilities, providing a margin of safety.
Similarly, the quick ratio, which considers only the most liquid assets (such as cash and accounts receivable) to meet short-term obligations, has also displayed an upward trajectory over the period, from 3.31 in Q4 2022 to 4.19 in Q4 2023. This indicates a strong ability to meet short-term liabilities without relying on inventory or other less liquid assets.
Additionally, the cash ratio, focusing solely on cash and cash equivalents compared to current liabilities, has shown an increasing trend, signaling improved liquidity and financial stability. The cash ratio has risen from 2.62 in Q4 2022 to 3.35 in Q4 2023. This suggests that Enphase Energy Inc has a sufficient cash reserve to cover its immediate financial obligations.
Overall, the liquidity ratios of Enphase Energy Inc suggest a healthy financial position, with ample resources to meet short-term obligations and weather potential financial challenges.
See also:
Enphase Energy Inc 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 | 99.91 | 95.95 | 88.17 | 82.89 | 75.67 | 82.89 | 79.75 | 82.63 | 70.75 | 67.17 | 69.41 | 63.68 | 59.58 | 52.80 | 51.03 | 47.82 | 62.00 | 63.14 | 26.52 | 25.22 |
The cash conversion cycle of Enphase Energy Inc has demonstrated fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle increased to 99.91 days compared to 95.95 days in Q3 2023. This reflects a lengthening of the time it takes for the company to convert its investments in inventory and other resources into cash receipts from customers.
The trend of the cash conversion cycle over the past year shows some variability, with Q1 2023 registering the lowest value at 82.89 days. This implies that the company was able to manage its working capital more efficiently during that period. However, the cycle has generally been within a range of 75.67 days to 99.91 days over the past eight quarters.
The cash conversion cycle is an important metric for assessing how effectively a company manages its working capital and liquidity. A longer cycle can indicate inefficiencies in managing inventory, accounts receivable, and accounts payable, potentially leading to increased financing costs and reduced profitability.
Overall, Enphase Energy Inc should continue monitoring its cash conversion cycle closely to identify areas for improvement and ensure efficient utilization of its resources to support its financial performance and long-term sustainability.