Heritage Financial Corporation (HFWA)
Liquidity ratios
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Current ratio | — | 8.49 | 0.27 | 0.48 | 0.33 |
Quick ratio | — | 9.54 | 0.27 | 0.48 | 0.33 |
Cash ratio | — | 9.54 | 0.27 | 0.48 | 0.33 |
Based on the provided data, let's analyze the liquidity ratios of Heritage Financial Corporation:
1. Current Ratio:
- The current ratio is a measure of a company's ability to cover its short-term liabilities with its short-term assets.
- In 2020, the current ratio was 0.33, indicating that the company had 33 cents in current assets for every dollar of current liabilities.
- Over the next few years, the current ratio improved significantly to 0.48 in 2021 and then decreased to 0.27 in 2022.
- A notable increase was observed in 2023, where the current ratio surged to 8.49, suggesting a significant improvement in the company's liquidity position. However, the ratio in 2024 is not available in the data provided.
2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets.
- Similar to the current ratio, the quick ratio showed a similar trend over the years, with values mirroring the current ratio data.
- Notably, the quick ratio in 2023 reached a significantly higher value of 9.54, indicating a strong ability to meet short-term obligations without relying on inventory.
3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, measuring the company's ability to cover its current liabilities with only cash and cash equivalents.
- The cash ratio followed the same trends as the current and quick ratios, with values consistent across the years except for a notable increase to 9.54 in 2023.
- This indicates that in 2023, Heritage Financial Corporation had a sufficient amount of cash and cash equivalents to cover its short-term obligations without relying on other current assets.
Overall, the liquidity ratios of Heritage Financial Corporation show fluctuations over the years, with significant improvements in 2023. However, further analysis and information are needed to understand the factors driving these fluctuations and the company's overall liquidity position.
Additional liquidity measure
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
The cash conversion cycle for Heritage Financial Corporation has consistently been 0.00 days for the years 2020, 2021, 2022, 2023, and 2024. This indicates that the company is efficiently managing its working capital, with a short duration between the outflow of cash for inventory and the inflow of cash from customer sales. A low or zero cash conversion cycle suggests that the company is effectively turning its investments in inventory into sales and cash receipts promptly, which can be a positive indicator of operational efficiency and liquidity management.