Exponent Inc (EXPO)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 2.34 | 2.20 | 2.96 | 3.13 | 2.94 |
| Quick ratio | 2.19 | 2.08 | 2.86 | 3.02 | 2.84 |
| Cash ratio | 1.16 | 1.02 | 1.95 | 2.07 | 1.87 |
Exponent Inc's liquidity ratios indicate the company's ability to meet its short-term obligations. The current ratio has been relatively stable over the past five years, averaging around 2.71. This ratio suggests that Exponent has a healthy level of current assets to cover its current liabilities, with a favorable upward trend in 2021.
The quick ratio has also exhibited stability, averaging approximately 2.8 over the same period. This ratio reflects Exponent's ability to meet its short-term obligations without relying on inventory, providing a more stringent measure of liquidity than the current ratio.
The cash ratio, which measures the firm's ability to pay off its current liabilities solely with cash and cash equivalents, has been lower compared to the current and quick ratios. However, it has shown consistency over time, ranging between 1.02 and 2.07.
Overall, Exponent Inc's liquidity ratios suggest that the company has maintained a strong liquidity position, with sufficient current assets to cover short-term liabilities. The stability in these ratios indicates prudent management of working capital and cash resources.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 109.17 | 110.27 | 105.60 | 97.39 | 99.04 |
The cash conversion cycle for Exponent Inc has shown some fluctuations over the past five years. In 2023, the cash conversion cycle was 109.17 days, slightly lower compared to the previous year's figure of 110.27 days. This indicates that it took Exponent Inc slightly less time to convert its investments in inventory and other resources into cash during the most recent year.
Looking back further, we see a general increasing trend in the cash conversion cycle from 2020 to 2022, with a peak in 2022 at 110.27 days. However, there was a slight improvement in 2023 compared to 2022. This trend suggests that Exponent Inc may have faced challenges in managing its working capital efficiently in the years leading up to 2022 but has since made some improvements in this area.
Overall, monitoring the cash conversion cycle is crucial as it provides insights into how efficiently a company is managing its working capital and converting its assets into cash. Exponent Inc should continue to assess its operational efficiency and working capital management practices to optimize its cash conversion cycle in the future.