Huntington Ingalls Industries Inc (HII)

Based on the provided data, let's analyze Huntington Ingalls Industries Inc liquidity ratios:

1. Current Ratio:
- The current ratio measures the company's ability to meet its short-term obligations using its current assets.
- Huntington Ingalls Industries Inc's current ratio has fluctuated over the years. It was 1.10 in 2020, increasing to 1.15 in 2021, but then decreased to 0.95 in 2022 and remained at the same level in 2023 before improving to 1.08 in 2024.
- The current ratio above 1 indicates that the company has more current assets than current liabilities, which is generally considered favorable for meeting short-term obligations.

2. Quick Ratio:
- The quick ratio is a more stringent measure of liquidity as it excludes inventory from current assets.
- Huntington Ingalls Industries Inc's quick ratio has also shown variability over the years. It was 0.49 in 2020, slightly increasing to 0.52 in 2021, but then declining to 0.44 in 2022 and further dropping to 0.35 in 2023, before recovering to 0.42 in 2024.
- A quick ratio of less than 1 may indicate potential difficulty in meeting short-term obligations without relying on selling inventory.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio as it only considers the most liquid current assets, which is cash.
- Huntington Ingalls Industries Inc's cash ratio has also been inconsistent, ranging from 0.14 to 0.28 over the years.
- A higher cash ratio indicates a higher ability to cover short-term liabilities with cash on hand, providing a more stable measure of liquidity.

In summary, Huntington Ingalls Industries Inc's liquidity ratios have demonstrated fluctuations over the years, with improvements seen in the current ratio and cash ratio in 2024. Monitoring these liquidity ratios is essential to assess the company's short-term financial health and ability to meet its obligations.

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Additional liquidity measure

Based on the data provided, Huntington Ingalls Industries Inc has exhibited a consistent negative cash conversion cycle over the years, indicating efficiency in managing its working capital and converting it into cash flow. The cash conversion cycle calculates the time it takes for a company to convert its investments in inventory and accounts receivable into cash received from customers.

In 2020, the company's cash conversion cycle was -99.02 days, meaning it took less than 100 days to convert its working capital into cash. By the end of 2021, this cycle extended to -139.35 days. However, in 2022, there was a slight improvement as the cash conversion cycle decreased to -129.90 days. Subsequently, by the end of 2023, the cycle was -96.28 days, showing a swift conversion of working capital into cash. In the most recent year of 2024, the cash conversion cycle was -118.40 days, indicating the company continued to efficiently manage its working capital.

Overall, Huntington Ingalls Industries Inc has consistently operated with a negative cash conversion cycle, which suggests effective management of inventory, accounts receivable, and accounts payable to optimize cash flow and liquidity. This efficiency in working capital management allows the company to maintain a competitive position in its industry and potentially reinvest cash into growth opportunities.