Flowserve Corporation (FLS)

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 1.98 1.99 2.00 1.88 1.88 2.02 2.00 1.92 1.97 2.04 2.09 2.07 2.11 1.69 2.28 2.26 2.54 2.57 2.23 2.19
Quick ratio 0.46 0.42 0.37 0.36 0.38 0.37 0.33 0.31 0.35 0.32 0.42 0.50 0.58 0.76 0.59 0.61 0.96 0.84 0.52 0.56
Cash ratio 0.46 0.42 0.37 0.36 0.38 0.37 0.33 0.31 0.35 0.32 0.42 0.50 0.58 0.76 0.59 0.61 0.96 0.84 0.52 0.56

Flowserve Corporation's liquidity ratios have shown some fluctuations over the last few years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 2x, indicating a healthy liquidity position. However, there was a notable decrease in the current ratio in the most recent quarter, dropping to 1.88x.

The quick ratio, also known as the acid-test ratio, focuses on the most liquid assets to cover short-term obligations. Flowserve's quick ratio has generally been below 1x, indicating a lower level of liquidity compared to the current ratio. The ratio has shown some variability over time, with a decrease in the most recent quarter to 0.46x, potentially signaling a tighter liquidity position.

The cash ratio, which is the most conservative liquidity measure, reflects the company's ability to cover its current liabilities with cash and cash equivalents alone. Flowserve's cash ratio has generally been in line with the quick ratio, demonstrating a lower level of liquidity. The ratio has also experienced fluctuations, reaching 0.46x in the most recent quarter.

Overall, while Flowserve Corporation has maintained a current ratio above 1x, hinting at a comfortable liquidity position, the decreasing trend in the quick and cash ratios in the latest quarter may indicate some potential liquidity challenges that the company needs to monitor closely.

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 98.47 100.87 99.31 103.90 105.52 112.90 118.42 119.58 111.86 112.47 108.96 105.62 99.37 100.75 98.58 94.60 93.12 98.64 93.64 93.10

The cash conversion cycle of Flowserve Corporation has fluctuated over the years based on the provided data. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is efficient in managing its working capital.

Based on the data provided:
- The cash conversion cycle ranged from a low of around 93 days to a high of around 119 days over the period.
- There seems to be a slight upward trend in the cash conversion cycle from 2020 to 2024, indicating potential inefficiencies in managing working capital during this period.
- The highest value was observed in March 31, 2023, at 119.58 days, while the lowest was in December 31, 2024, at 98.47 days.
- The cash conversion cycle experienced fluctuations throughout the period, which may be influenced by various factors such as changes in inventory management, accounts receivable collection, and payable periods.

Flowserve Corporation should strive to maintain a balance in managing its working capital efficiently to optimize its cash conversion cycle and enhance its overall financial performance.