Itron Inc (ITRI)

Looking at Itron Inc.'s liquidity ratios over the past five years, we can observe a generally positive trend in terms of its ability to meet short-term obligations.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown improvement over the years. The ratio has increased from 1.49 in 2019 to 1.95 in 2023, indicating that the company has a sufficient level of current assets to cover its current liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Like the current ratio, the quick ratio has also shown an upward trend, increasing from 1.15 in 2019 to 1.43 in 2023. This suggests that the company has a strong ability to meet its short-term obligations without relying on the sale of inventory.

Lastly, the cash ratio, which focuses solely on the company's ability to cover its short-term liabilities with cash and cash equivalents, has also improved over the period. The ratio has increased from 0.44 in 2019 to 0.86 in 2023, indicating that the company has a higher level of cash to meet its immediate obligations.

Overall, the liquidity ratios of Itron Inc. demonstrate a strengthening liquidity position, with the company having an increasing ability to meet its short-term financial commitments using its available current assets, cash, and cash equivalents.

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Additional liquidity measure

In analyzing Itron Inc.'s cash conversion cycle over the past five years, we observe fluctuations in the efficiency of the company's working capital management. The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, increased from 48.08 days in 2019 to 72.06 days in 2023.

The significant increase in the cash conversion cycle from 2019 to 2023 suggests that Itron Inc. may be taking longer to convert its resources into cash. This could indicate issues in managing inventory levels, collecting receivables promptly, or potentially longer payment periods to suppliers.

Although the cash conversion cycle decreased from 2019 to 2021, showing improved efficiency in working capital management, the subsequent increase in 2023 indicates a reversal in this trend. This fluctuation highlights the importance for Itron Inc. to focus on optimizing its working capital processes to enhance liquidity and operational efficiency.

Further analysis of the underlying factors driving these changes in the cash conversion cycle, such as inventory turnover, accounts receivable collection period, and accounts payable payment period, would provide more insights into the company's working capital management practices and potential areas for improvement.