Hayward Holdings Inc (HAYW)

Hayward Holdings Inc's liquidity position, as indicated by its liquidity ratios, has shown some fluctuations over the years.

1. Current Ratio: The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been increasing from 1.94 in 2020 to 2.45 in 2024. This indicates that Hayward Holdings Inc has been improving its liquidity position over the years.

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. Hayward Holdings Inc's quick ratio has experienced fluctuations, reaching its lowest point at 0.24 in 2022 and then improving to 0.85 in 2023. This shows some volatility in the company's ability to meet its short-term obligations without relying on inventory.

3. Cash Ratio: The cash ratio, which is the most conservative measure of liquidity as it considers only cash and cash equivalents, has followed a similar trend to the quick ratio. It decreased to 0.24 in 2022 but recovered to 0.63 in 2024. This indicates some level of stability in Hayward Holdings Inc's ability to meet its short-term obligations using only its cash reserves.

In conclusion, while Hayward Holdings Inc has shown improvements in its current ratio over the years, there have been fluctuations in its quick ratio and cash ratio. Overall, the company seems to have managed its liquidity well, but there may be some areas needing further attention to ensure consistent liquidity levels.

---

Additional liquidity measure

The cash conversion cycle of Hayward Holdings Inc has shown a noticeable trend over the years, increasing from 110.86 days at the end of 2020 to 151.70 days by the end of 2024. This indicates that the company is taking longer to convert its investments in inventory into cash receipts from customers.

The increase in the cash conversion cycle suggests that Hayward Holdings Inc may be facing challenges in managing its working capital efficiently. A longer cash conversion cycle can tie up valuable resources and potentially indicate inefficiencies in the company's operations or supply chain.

It is important for the company to closely monitor and manage its cash conversion cycle to ensure that it does not negatively impact its liquidity and overall financial health. Strategies to improve this metric could include optimizing inventory management, streamlining accounts receivable processes, and negotiating favorable payment terms with suppliers.