Comfort Systems USA Inc (FIX)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.08 | 1.04 | 1.00 | 0.96 | 1.11 | 1.11 | 1.01 | 1.04 | 1.12 | 1.30 | 1.28 | 1.33 | 1.23 | 1.22 | 1.14 | 1.10 | 1.17 | 1.24 | 1.16 | 1.46 |
| Quick ratio | 0.21 | 0.17 | 0.09 | 0.05 | 0.12 | 0.08 | 0.04 | 0.03 | 0.05 | 0.07 | 0.07 | 0.13 | 0.07 | 0.09 | 0.07 | 0.08 | 0.08 | 0.11 | 0.08 | 0.22 |
| Cash ratio | 0.21 | 0.17 | 0.09 | 0.05 | 0.12 | 0.08 | 0.04 | 0.03 | 0.05 | 0.07 | 0.07 | 0.13 | 0.07 | 0.09 | 0.07 | 0.08 | 0.08 | 0.11 | 0.08 | 0.22 |
Comfort Systems USA Inc's current ratio has fluctuated over the past few years, starting at 1.46 as of March 31, 2020, reaching a peak of 1.33 as of March 31, 2022, and declining to 0.96 as of March 31, 2024. This ratio indicates that the company's current assets exceed its current liabilities, providing a buffer to meet short-term obligations.
The quick ratio, which excludes inventory from current assets, has shown a similar pattern of variability, with values ranging from a low of 0.03 as of March 31, 2023, to a high of 0.21 as of December 31, 2024. This ratio suggests that the company may have difficulty meeting immediate obligations without relying on inventory.
The cash ratio, which measures a company's ability to cover its current liabilities with its cash and cash equivalents, has also exhibited fluctuations, mirroring the trend seen in the quick ratio. Comfort Systems USA Inc's cash ratio has ranged from 0.03 as of March 31, 2023, up to 0.21 as of December 31, 2024, indicating varying levels of liquidity and ability to pay off short-term debts solely with cash on hand.
Overall, while Comfort Systems USA Inc has maintained a current ratio above 1, indicating an ability to cover short-term liabilities, the variability in the quick and cash ratios suggests some uncertainty in the company's liquidity position over the analyzed period.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 3.88 | 3.88 | 4.75 | 5.75 | 5.66 | 4.86 | 3.93 | 3.72 | 3.79 | 4.36 | 3.86 | 3.37 | 3.18 | 3.07 | 3.04 | 2.51 | 2.13 | 1.99 | 1.91 | 1.66 |
Comfort Systems USA Inc's cash conversion cycle has shown a fluctuating trend over the analyzed period. The company's cash conversion cycle started at 1.66 days on March 31, 2020, steadily increased to a peak of 5.75 days on March 31, 2024, and then decreased slightly to 3.88 days by December 31, 2024.
The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash flows from sales. An increasing trend in the cash conversion cycle indicates that Comfort Systems USA Inc is taking longer to convert its working capital into cash, potentially signaling inefficiencies in managing inventory or collecting receivables.
The spike in the cash conversion cycle from 3.86 days on June 30, 2022, to 4.36 days on September 30, 2022, and further to 5.66 days on December 31, 2023, could be a cause for concern. This prolonged cycle may affect the company's liquidity and working capital management.
It is essential for Comfort Systems USA Inc to closely monitor and potentially optimize its inventory and accounts receivable processes to reduce its cash conversion cycle, improve cash flow efficiency, and enhance overall financial performance.