Hubbell Inc (HUBB)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.64 | 1.64 | 1.86 | 1.76 | 1.67 |
| Quick ratio | 0.86 | 0.86 | 1.10 | 0.91 | 0.87 |
| Cash ratio | 0.27 | 0.26 | 0.42 | 0.28 | 0.28 |
Based on the provided data for Hubbell Inc, we observe the following trends in liquidity ratios:
1. Current Ratio: Hubbell Inc's current ratio has shown a generally increasing trend from 1.67 in December 2020 to 1.86 in December 2022, indicating the company's improving ability to cover its short-term obligations with its current assets. However, there was a slight decrease to 1.64 in both December 2023 and December 2024, which may suggest a potential strain on liquidity in those periods.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, reflects a company's ability to meet its short-term liabilities with its most liquid assets. Hubbell Inc's quick ratio ranged from 0.87 in December 2020 to 1.10 in December 2022, but then decreased to 0.86 in both December 2023 and December 2024. This decline indicates a slight reduction in the company's ability to meet its immediate obligations without relying on inventory.
3. Cash Ratio: The cash ratio represents the proportion of a company's current assets held in cash or cash equivalents. Hubbell Inc's cash ratio remained relatively stable over the years, ranging from 0.26 to 0.42. This suggests that the company maintains a moderate level of liquidity in the form of cash to cover its short-term liabilities.
Overall, while Hubbell Inc has shown improvement in its current and quick ratios over the years, the slight decline in these ratios in the most recent periods may warrant further monitoring to ensure sufficient liquidity to meet upcoming obligations.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 72.55 | 76.03 | 73.09 | 72.43 | 67.19 |
Hubbell Inc's cash conversion cycle has shown variations over the past five years. The cycle increased from 67.19 days as of December 31, 2020, to 72.43 days as of December 31, 2021, indicating a potential slowdown in the company's cash collection, inventory turnover, and payment to suppliers.
Subsequently, the cash conversion cycle continued to rise, reaching 73.09 days by December 31, 2022, and peaking at 76.03 days by December 31, 2023. This trend suggests a longer period between disbursing payments to suppliers and receiving cash from customers, which may lead to a strain on the company's working capital management.
However, there was a slight improvement in the cash conversion cycle by December 31, 2024, decreasing to 72.55 days. Despite this improvement, the company may still face challenges in efficiently managing its working capital to enhance cash flow.
Overall, Hubbell Inc's cash conversion cycle performance indicates a need for the company to focus on optimizing its cash collection, inventory management, and payment processes to enhance operational efficiency and overall financial performance.