Comfort Systems USA Inc (FIX)

Based on the provided data, we can analyze the liquidity ratios of Comfort Systems USA Inc over the years.

1. Current Ratio: The current ratio measures the company's ability to cover its short-term obligations with its short-term assets. Comfort Systems USA Inc's current ratio has been fluctuating slightly over the years: from 1.17 in 2020 to 1.08 in 2024. Although the ratio is above 1, indicating the company has more current assets than current liabilities, the decreasing trend suggests potential challenges in meeting short-term obligations.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Comfort Systems USA Inc's quick ratio has shown a declining trend from 0.08 in 2020 to 0.21 in 2024. A quick ratio below 1 may raise concerns about the company's ability to cover immediate liabilities without relying on selling inventory.

3. Cash Ratio: The cash ratio is the most conservative liquidity ratio as it only considers cash and cash equivalents to cover current liabilities. Comfort Systems USA Inc's cash ratio has mirrored the trends seen in the quick ratio, starting at 0.08 in 2020 and reaching 0.21 in 2024. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on other current assets.

Overall, the liquidity ratios of Comfort Systems USA Inc have shown mixed trends over the years, with the current ratio slightly declining, while the quick and cash ratios have improved. It is important for investors and stakeholders to monitor these ratios to assess the company's ability to meet its short-term financial obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Comfort Systems USA Inc has shown some fluctuations over the past five years. The trend indicates a slight increase in the duration required to convert resources into cash. Specifically, the cycle increased from 2.13 days as of December 31, 2020, to 3.89 days as of December 31, 2024. This suggests that the company may be taking longer to convert its investments in inventory and receivables into cash.

The cash conversion cycle is an important metric for analyzing the efficiency of a company's working capital management. A longer cycle could indicate potential issues with inventory management, collections from customers, or delays in payments to suppliers. However, it is also worth noting that the company was able to reduce the cycle duration from the peak of 5.67 days on December 31, 2023, to 3.89 days on December 31, 2024.

Overall, Comfort Systems USA Inc should continue monitoring its cash conversion cycle closely to ensure efficient working capital management and optimize its cash flow operations.