Hubbell Inc (HUBB)
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 | 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 | 1.86 | 2.09 | 1.98 | 1.95 |
| Quick ratio | 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 | 1.04 | 1.27 | 1.15 | 1.10 |
| Cash ratio | 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 | 0.23 | 0.36 | 0.25 | 0.25 |
Hubbell Inc.'s liquidity ratios provide insights into the company's ability to meet short-term obligations.
- The current ratio indicates the company's ability to cover its current liabilities with its current assets. Hubbell's current ratio has fluctuated over the quarters, ranging from 1.64 to 2.16. While the ratios are generally above 1, indicating the company has more current assets than current liabilities, the downward trend suggests a potential decrease in liquidity over time.
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure by excluding inventory from current assets. Hubbell's quick ratio has also shown variability, ranging from 0.95 to 1.43. The ratios are generally above 1, indicating that the company can cover its short-term liabilities with its most liquid assets. However, the decreasing trend raises a concern about the company's ability to meet obligations without relying on inventory.
- The cash ratio, the most conservative liquidity measure, focuses solely on cash and cash equivalents. Hubbell's cash ratio has fluctuated between 0.36 and 0.63, indicating the company's ability to cover its current liabilities with cash on hand. As with the other liquidity ratios, the downward trend suggests a potential decrease in the company's cash position over time.
Overall, while Hubbell Inc. generally maintains adequate liquidity levels to meet its short-term obligations, the downward trends in the liquidity ratios over the quarters warrant further monitoring to ensure the company's financial health and ability to navigate uncertain economic conditions.
See also:
Hubbell Inc Liquidity Ratios (Quarterly Data)
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 | 76.01 | 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 | 80.51 | 84.62 | 83.97 | 81.32 |
The cash conversion cycle is a crucial metric that reflects how efficiently a company manages its working capital. It is calculated by adding the days sales outstanding (DSO) to the days inventory outstanding (DIO) and then subtracting the days payables outstanding (DPO).
Based on the data provided for Hubbell Inc., we can observe fluctuations in the cash conversion cycle over the past eight quarters. In Q4 2023, the cash conversion cycle stands at 81.57 days, showing a slight improvement from Q3 2023 when it was at 84.07 days. This suggests that the company has been able to convert its resources into cash more effectively during the latest quarter.
Analyzing further, the trend over the past year indicates that the cash conversion cycle has generally been within the range of 76 to 86 days, with some fluctuations. The highest point was seen in Q3 2022 at 85.58 days, while the lowest was in Q4 2022 at 76.84 days. This variability in the cycle may indicate changes in the company's sales, inventory management, and payment practices.
Overall, it is essential for Hubbell Inc. to monitor and manage its cash conversion cycle effectively to ensure optimal utilization of its working capital. A decreasing trend in the cycle signifies improved efficiency in converting resources into cash, while an increasing trend may signal inefficiencies that need to be addressed for better financial performance.