Hubbell Inc (HUBB)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.64 | 1.66 | 1.81 | 1.66 | 1.64 | 2.16 | 2.06 | 1.99 | 1.86 | 1.88 | 2.03 | 2.00 | 1.76 | 1.77 | 1.75 | 1.59 | 1.67 | 2.07 | 2.04 | 1.99 |
| Quick ratio | 0.86 | 0.96 | 1.03 | 0.94 | 0.86 | 1.35 | 1.23 | 1.16 | 1.10 | 1.11 | 1.22 | 1.19 | 0.91 | 1.03 | 1.04 | 1.00 | 0.87 | 1.25 | 1.29 | 1.21 |
| Cash ratio | 0.27 | 0.32 | 0.32 | 0.30 | 0.26 | 0.55 | 0.48 | 0.42 | 0.42 | 0.36 | 0.44 | 0.39 | 0.28 | 0.26 | 0.28 | 0.39 | 0.28 | 0.35 | 0.56 | 0.37 |
Overall, Hubbell Inc has shown a relatively stable current ratio over the past few years, fluctuating between 1.59 and 2.16, which indicates the company's ability to cover its short-term obligations with its current assets. However, there was a slight decrease in the current ratio towards the end of 2023 and into 2024, suggesting a potential weakening in short-term liquidity.
The quick ratio, which excludes inventory from current assets, follows a similar trend to the current ratio but generally remains slightly lower. This indicates that Hubbell Inc may have some dependency on inventory to meet its short-term obligations.
The cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has shown fluctuations but generally remains within a reasonable range. This ratio indicates the company's ability to meet its short-term liabilities using its most liquid assets.
In conclusion, while the current and quick ratios suggest good liquidity levels for Hubbell Inc, the downward trend in the current ratio towards the end of the period should be monitored for any potential liquidity challenges in the future. The cash ratio provides additional insights into the company's ability to meet short-term obligations primarily with its cash reserves.
See also:
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 72.73 | 81.80 | 80.16 | 77.67 | 76.01 | 79.43 | 77.60 | 76.15 | 73.08 | 75.63 | 75.61 | 75.90 | 66.09 | 84.25 | 80.00 | 81.36 | 67.17 | 80.84 | 78.16 | 78.04 |
The cash conversion cycle of Hubbell Inc has been fluctuating over the years but generally shows a trend of around 70 to 80 days, indicating the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales to customers. The cycle demonstrates the efficiency of the company in managing its working capital.
In the recent periods, the cash conversion cycle has ranged from 66.09 days to 84.25 days, with the cycle being at its shortest in December 2021 and at its longest in September 2021. A lower cash conversion cycle is generally considered more favorable as it implies quicker conversion of investments into cash, indicating efficient operations and effective management of inventory, accounts receivable, and accounts payable.
Overall, Hubbell Inc may benefit from focusing on reducing its cash conversion cycle further to improve its liquidity position and maximize its cash flow generation efficiency. This could be achieved through streamlining inventory management, improving collection processes for accounts receivable, and optimizing payment terms with suppliers to enhance working capital management.