HNI Corp (HNI)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Mar 31, 2024 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
Current ratio 1.10 1.09 1.29 1.16 1.14 1.22 1.27 1.19 1.17 1.27 1.15 1.03 1.21 1.25 1.23 1.13 1.20 1.19 1.32 1.10
Quick ratio 0.06 0.08 0.08 0.61 0.06 0.06 0.05 0.60 0.05 0.04 0.05 0.58 0.26 0.26 0.24 0.74 0.27 0.08 0.10 0.68
Cash ratio 0.06 0.08 0.08 0.07 0.06 0.06 0.05 0.05 0.05 0.04 0.05 0.11 0.26 0.26 0.24 0.27 0.27 0.08 0.10 0.11

Based on the provided data for HNI Corp's liquidity ratios, it is evident that the company maintained a relatively stable current ratio over the period from December 31, 2019, to December 31, 2024, fluctuating between a low of 1.03 and a high of 1.32. The current ratio measures the firm's ability to cover its short-term obligations with its current assets, indicating that HNI Corp generally had sufficient short-term assets to meet its current liabilities throughout the period.

In contrast, the quick ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets, showed more variability. HNI Corp experienced significant fluctuations in its quick ratio, with values ranging from a low of 0.04 to a high of 0.74. The lower quick ratios suggest that the company's ability to meet its short-term obligations without relying on inventory was occasionally strained, particularly in the first half of the period.

Lastly, the cash ratio, which specifically assesses the company's ability to cover its current liabilities with its cash and cash equivalents, remained relatively low throughout the period. The values for the cash ratio were generally below 0.1, indicating that HNI Corp held minimal cash relative to its current liabilities. This suggests that the company may have relied more on other current assets to meet its short-term obligations rather than cash holdings.

Overall, HNI Corp's liquidity ratios demonstrate a mix of strengths and weaknesses in managing its short-term financial obligations. While the company maintained a reasonable current ratio over the period, indicating overall liquidity, the fluctuations in the quick ratio and the consistently low cash ratio highlight areas where HNI Corp may need to focus on improving its liquidity management strategies.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 0.59 31.00 31.74 37.50 37.17 39.68 31.93 36.14 35.13 36.00 34.34 31.05 33.67 35.06 30.12 28.83 27.39 28.33 29.38 33.73

The cash conversion cycle of HNI Corp has fluctuated over the years based on the provided data. Starting at 33.73 days on December 31, 2019, the cycle decreased to 27.39 days by September 30, 2020, indicating an improvement in cash management efficiency. However, the cycle then increased, reaching a peak of 39.68 days on June 30, 2023, before gradually declining to 31 days by December 31, 2024.

A lower cash conversion cycle is typically favorable as it indicates that the company is efficiently managing its working capital and can quickly convert its inventory into cash. On the other hand, a longer cycle may suggest that the company is taking more time to sell its inventory and collect receivables.

It is important for HNI Corp to closely monitor its cash conversion cycle and work towards optimizing it to ensure efficient use of its resources and improved liquidity position. By analyzing variations in the cycle, the company can identify areas for improvement and implement strategies to enhance its cash management practices.