Ingersoll Rand Inc (IR)

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 2.29 2.36 2.18 2.32 2.22 2.26 2.29 2.16 2.37 2.46 2.43 2.88 2.80 2.47 3.13 2.70 2.58 2.43 2.25 2.11
Quick ratio 1.58 1.53 1.34 1.56 1.55 1.46 1.48 1.39 1.63 1.64 1.59 2.07 2.08 1.81 2.53 1.70 1.81 1.58 1.42 1.14
Cash ratio 0.85 0.78 0.60 0.84 0.87 0.72 0.73 0.66 0.96 0.96 0.89 1.37 1.44 1.25 2.01 1.07 1.17 0.92 0.79 0.40

In analyzing Ingersoll Rand Inc's liquidity ratios, we first look at the current ratio, a measure of the company's ability to meet its short-term obligations with its current assets. The current ratio has shown a generally increasing trend from March 31, 2020, to June 30, 2021, peaking at 3.13. However, there was a slight decline in the ratio in the following periods, ending at 2.29 on December 31, 2024. This indicates that the company may have relatively fewer current assets to cover its short-term liabilities towards the end of the period.

Next, we examine the quick ratio, also known as the acid-test ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets. The quick ratio displayed a similar pattern to the current ratio, reaching its highest level of 2.53 on June 30, 2021, before decreasing to 1.58 on December 31, 2024. This suggests that the company's ability to meet its short-term obligations without relying on inventory declined over the period.

Lastly, we consider the cash ratio, which is the most stringent measure of liquidity as it only includes cash and cash equivalents in relation to current liabilities. The cash ratio for Ingersoll Rand Inc fluctuated over the years, with a peak of 2.01 on June 30, 2021, and a low of 0.60 on June 30, 2024. This indicates that the company's cash position in relation to its current liabilities has varied significantly during the period under review.

Overall, while Ingersoll Rand Inc maintained relatively healthy liquidity ratios throughout the period, there were fluctuations, especially towards the end of the period, which may warrant further monitoring to ensure the company can meet its short-term obligations effectively.

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 86.35 106.44 105.29 98.75 83.78 105.52 109.79 111.29 94.30 98.39 100.89 97.11 88.39 96.30 89.29 99.99 111.82 184.33 210.32 266.96

The cash conversion cycle of Ingersoll Rand Inc has seen fluctuations over the years, reflecting the efficiency of its cash management and working capital processes.

From March 31, 2020, to December 31, 2022, the cash conversion cycle decreased steadily from 266.96 days to 94.30 days, indicating improvements in managing cash flows, inventory turnover, and accounts receivable collection.

However, from March 31, 2023, to December 31, 2024, there was some volatility in the cash conversion cycle, fluctuating between 83.78 days and 106.44 days. This may suggest challenges or changes in the company's operations, impacting its ability to efficiently convert investments in raw materials into cash receipts from sales.

Overall, Ingersoll Rand Inc should continue monitoring and optimizing its cash conversion cycle to ensure effective working capital management and sustained financial performance.