Fortune Brands Innovations Inc. (FBIN)
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 | 1.70 | 1.80 | 1.49 | 1.63 | 1.59 | 1.47 | 2.13 | 2.18 | 1.39 | 1.78 | 1.87 | 1.96 | 1.64 | 1.88 | 2.05 | 1.54 | 1.35 | 1.39 | 1.13 | 1.49 |
| Quick ratio | 0.75 | 0.87 | 0.79 | 0.43 | 0.81 | 0.63 | 0.94 | 1.03 | 0.69 | 0.90 | 0.96 | 0.99 | 0.86 | 1.08 | 1.11 | 0.83 | 0.72 | 0.71 | 0.58 | 0.75 |
| Cash ratio | 0.31 | 0.38 | 0.42 | 0.43 | 0.47 | 0.17 | 0.25 | 0.28 | 0.24 | 0.30 | 0.34 | 0.30 | 0.31 | 0.41 | 0.42 | 0.29 | 0.28 | 0.24 | 0.16 | 0.23 |
Based on the provided data, Fortune Brands Innovations Inc.'s liquidity ratios have shown fluctuations over the reported periods.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has varied between 1.39 and 2.18. A ratio above 1 indicates that the company has more current assets than current liabilities. Fortune Brands demonstrated relatively stable current ratios above 1, implying a generally healthy liquidity position over the periods analyzed.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, ranged from 0.43 to 1.11. This ratio reflects the company's ability to meet short-term obligations without relying on selling inventory, and the values suggest varying levels of liquidity and ability to cover immediate liabilities without relying on slow-moving inventory.
The cash ratio, which indicates the proportion of current liabilities covered by cash and cash equivalents, exhibited fluctuations between 0.16 and 0.47. This ratio signals the company's ability to settle short-term obligations with its readily available cash resources. Fortune Brands showed varying levels of this ratio over the periods, with some quarters demonstrating stronger cash positions than others.
Overall, while the company generally maintained current ratios above 1, indicating a favorable liquidity position, the quick and cash ratios revealed more variability in Fortune Brands Innovations Inc.'s ability to quickly cover short-term obligations from its most liquid assets. It is important for the company to closely monitor these ratios to ensure it can meet its short-term financial commitments efficiently.
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 | 79.84 | 81.97 | 101.54 | 61.19 | 118.78 | 177.21 | 161.68 | 152.94 | 109.54 | 109.37 | 91.41 | 88.32 | 66.98 | 65.92 | 68.71 | 69.31 | 64.99 | 72.74 | 72.30 | 72.86 |
The cash conversion cycle of Fortune Brands Innovations Inc. provides insight into the efficiency of the company's working capital management.
Looking at the trend over the last few quarters, we observe fluctuations in the cash conversion cycle. In the most recent quarter, ending December 31, 2023, the cash conversion cycle was 79.84 days, a slight improvement compared to the preceding quarter.
The company's cash conversion cycle was relatively high in the previous quarters, reaching peaks of 177.21 days in September 2022 and 161.68 days in June 2022. These extended cycles may indicate delays in converting inventory to sales or collecting receivables, which could impact the company's liquidity and working capital position.
In contrast, there were instances of lower cash conversion cycles, such as in March 2021 and September 2020, where the cycles were 66.98 days and 65.92 days, respectively. These shorter cycles suggest that the company was able to efficiently manage its cash flows during those periods.
Overall, monitoring the cash conversion cycle can help evaluate how effectively Fortune Brands Innovations Inc. is managing its working capital, inventory, and receivables. Management should continue to focus on optimizing these processes to improve cash flow and overall financial performance.