Installed Building Products Inc (IBP)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 3.09 | 2.70 | 2.79 | 2.64 | 2.72 |
| Quick ratio | 3.47 | 3.09 | 3.12 | 3.21 | 2.95 |
| Cash ratio | 1.12 | 0.70 | 1.08 | 0.98 | 1.01 |
Installed Building Products Inc has shown a consistently strong liquidity position over the past five years, as evidenced by its current ratio, quick ratio, and cash ratio. The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, has improved steadily from 2.72 in 2019 to 3.09 in 2023. This indicates that Installed Building Products has more than enough current assets to cover its current liabilities.
The quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, has also shown an upward trend, increasing from 2.37 in 2019 to 2.62 in 2023. This suggests that the company has a strong ability to meet its short-term obligations without relying on the sale of inventory.
Furthermore, the cash ratio, which indicates the company's ability to pay off its current liabilities using only cash and cash equivalents, has also improved consistently over the years, reaching 1.40 in 2023. This shows that Installed Building Products has a solid cash position to meet its short-term obligations.
Overall, the liquidity ratios of Installed Building Products Inc demonstrate a healthy financial position, with ample current assets and cash reserves to cover its short-term liabilities. This suggests that the company is well-equipped to manage its working capital requirements and financial obligations effectively.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 109.31 | 113.32 | 119.94 | 112.56 | 96.44 |
The cash conversion cycle of Installed Building Products Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle improved to 56.43 days from 59.74 days in 2022, indicating that the company was more efficient in managing its cash conversion process. However, the cycle was slightly higher compared to 2021 and 2020, suggesting a longer time for the company to convert its investments in inventory and accounts receivable into cash.
Overall, the trend in the cash conversion cycle shows some variability but generally indicates that Installed Building Products Inc has been able to maintain a relatively stable and efficient cash conversion process over the years. Monitoring and managing this metric can help the company improve working capital management and overall financial performance.