Generac Holdings Inc (GNRC)

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 2.27 2.41 2.43 2.40 2.20 2.09 2.13 1.70 1.60 1.89 2.02 2.62 2.60 2.66 2.67 2.50 2.41 2.39 2.19 2.06
Quick ratio 0.84 0.83 0.78 0.69 0.66 0.70 0.99 0.65 0.60 0.92 1.04 1.65 1.61 1.64 1.48 1.28 1.29 1.24 0.94 0.86
Cash ratio 0.23 0.18 0.21 0.15 0.13 0.21 0.40 0.16 0.13 0.42 0.47 1.05 1.02 0.92 0.82 0.64 0.65 0.45 0.23 0.31

Generac Holdings Inc has shown relatively stable current ratios over the past eight quarters, ranging from 2.09 to 2.43. This indicates that the company has a strong ability to cover its short-term obligations with its current assets. However, the current ratio has slightly decreased in Q4 2023 compared to the previous quarter, which may warrant further monitoring.

In terms of the quick ratio, Generac Holdings Inc has demonstrated a fluctuating trend over the same period, with values ranging from 0.71 to 1.07. This ratio measures the company's ability to meet its immediate debt obligations with its most liquid assets, excluding inventory. The quick ratio has remained above 1 in all quarters except for Q1 2022, suggesting that the company generally has an adequate level of liquid assets to cover its short-term liabilities.

The cash ratio, which indicates the company's ability to pay off its current liabilities solely with its cash and cash equivalents, has also displayed some variability, ranging from 0.22 to 0.48. Despite this fluctuation, the cash ratio has generally remained at a low level, implying that Generac Holdings Inc may need to rely on sources other than cash to meet its short-term obligations.

Overall, while Generac Holdings Inc has maintained acceptable liquidity ratios, the downward trend in the current ratio and the relatively low cash ratio highlight the importance of closely monitoring the company's liquidity position to ensure its ability to meet financial obligations in the future.

See also:

Generac Holdings Inc Liquidity Ratios (Quarterly Data)

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 136.69 149.96 150.74 141.49 133.04 130.13 121.20 115.48 105.75 99.80 92.88 100.00 107.31 115.52 118.37 112.47 107.42 121.14 125.54 115.45

Generac Holdings Inc's cash conversion cycle has fluctuated over the past eight quarters, ranging from a low of 128.57 days in Q1 2022 to a high of 180.72 days in Q2 2023. 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 longer cash conversion cycle indicates that the company takes more time to generate cash from its operations, potentially signaling inefficiencies in managing inventory, collecting receivables, or paying suppliers. Conversely, a shorter cash conversion cycle suggests that the company is able to more quickly convert its investments into cash, improving its liquidity and operational efficiency.

Generac Holdings Inc's cash conversion cycle has shown some volatility, with an overall increasing trend in recent quarters. Analysis of the factors contributing to the lengthening of the cycle, such as inventory management practices, accounts receivable collection efficiency, and payment terms with suppliers, would be beneficial to assess the company's working capital management and overall financial health.