Heritage Financial Corporation (HFWA)
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 | 0.46 | 0.50 | 0.23 | 7.70 | 2.23 | 10.07 | 23.80 | 32.16 | 33.93 | 37.14 | 27.31 | 25.79 | 20.97 | 20.13 | 17.14 | 14.15 | 11.61 | 9.36 | 6.18 | 4.58 |
| Quick ratio | 0.45 | 0.47 | 0.22 | 7.70 | 2.23 | 10.07 | 23.77 | 32.14 | 33.90 | 37.08 | 27.25 | 25.60 | 20.83 | 19.84 | 16.99 | 13.82 | 11.34 | 9.16 | 6.02 | 4.47 |
| Cash ratio | 0.45 | 0.47 | 0.22 | 7.70 | 2.23 | 10.07 | 23.77 | 32.14 | 33.90 | 37.08 | 27.25 | 25.60 | 20.83 | 19.84 | 16.99 | 13.82 | 11.34 | 9.16 | 6.02 | 4.47 |
The liquidity ratios of Heritage Financial Corp. provide insights into the company's ability to meet its short-term obligations. The current ratio has been consistent at around 1.06 over the past eight quarters, indicating that the company has $1.06 in current assets for every $1 in current liabilities. This suggests a healthy liquidity position, although it has remained relatively stable.
The quick ratio, which excludes inventory from current assets, shows a declining trend from 0.47 in Q1 2022 to 0.38 in Q4 2023. This may indicate a potential decrease in the company's ability to meet its short-term obligations without needing to liquidate inventory.
The cash ratio, which is the most conservative liquidity measure, has also shown a decreasing trend from 0.47 in Q1 2022 to 0.37 in Q4 2023. This implies that the company's ability to cover its current liabilities solely with cash has weakened over the periods.
Overall, while the current ratio remains stable and at an acceptable level, the declining trends in the quick ratio and cash ratio suggest that Heritage Financial Corp. may need to monitor its liquidity position closely to ensure it can meet its short-term obligations effectively.
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 | 76.24 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1.93 | 2.03 | 2.02 | 2.87 | 4.51 |
The cash conversion cycle for Heritage Financial Corp. has shown some fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle increased slightly to 23.50 days compared to the previous quarter. The longer the cash conversion cycle, the longer the company's capital is tied up in operations before being converted into cash.
The trend over the past year indicates that Heritage Financial Corp. has been improving its efficiency in managing its working capital, as the average cash conversion cycle decreased from 25.65 days in Q1 2022 to 23.50 days in Q4 2023. A lower cash conversion cycle implies that the company is able to collect its receivables, sell inventory, and pay its payables more efficiently.
Despite the fluctuations in the cash conversion cycle, Heritage Financial Corp. seems to be effectively managing its working capital and maintaining a reasonable cycle length, which is essential for the company's financial health and liquidity. Further monitoring of this metric will provide valuable insights into the company's operational efficiency and cash management practices.