ITT Inc (ITT)
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 | 1.40 | 1.58 | 1.55 | 1.59 | 1.79 | 1.71 | 1.56 | 1.60 | 1.55 | 1.41 | 1.36 | 1.53 | 1.86 | 1.83 | 1.81 | 2.29 | 2.20 | 2.10 | 1.93 | 1.76 |
| Quick ratio | 0.86 | 0.99 | 0.91 | 0.98 | 1.12 | 1.06 | 0.98 | 1.01 | 1.00 | 0.90 | 0.87 | 1.07 | 1.30 | 1.27 | 1.26 | 1.60 | 1.57 | 1.47 | 1.35 | 1.28 |
| Cash ratio | 0.33 | 0.36 | 0.34 | 0.35 | 0.47 | 0.41 | 0.39 | 0.41 | 0.47 | 0.41 | 0.40 | 0.57 | 0.70 | 0.65 | 0.64 | 0.94 | 0.99 | 0.90 | 0.86 | 0.76 |
ITT Inc's current ratio has shown fluctuation over the past few years, ranging from a low of 1.36 in June 2022 to a high of 2.29 in March 2021. As of December 31, 2024, the current ratio stands at 1.40, indicating that the company may potentially face challenges in meeting its short-term obligations.
The quick ratio, which measures the company's ability to meet its current liabilities with its most liquid assets, has also varied over time. It reached a peak of 1.60 in March 2021 but has since declined to 0.86 as of December 31, 2024, signaling a potential decrease in the company's ability to cover its short-term obligations without relying on inventory.
Furthermore, the cash ratio, representing the proportion of a company's assets held in cash and cash equivalents to its current liabilities, has shown a similar downward trend. From a high of 0.99 in December 2020, the cash ratio has decreased to 0.33 as of December 31, 2024, suggesting a potential decrease in the company's ability to settle its short-term liabilities with its cash reserves alone.
Overall, based on the liquidity ratios analyzed, ITT Inc's ability to cover its short-term obligations appears to have weakened in recent years, potentially indicating increased financial risk and highlighting the importance of closely monitoring its liquidity position going forward.
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 | 91.01 | 108.16 | 95.65 | 105.20 | 98.29 | 104.30 | 108.13 | 109.61 | 100.29 | 103.72 | 99.94 | 92.87 | 84.53 | 87.15 | 88.76 | 89.53 | 86.32 | 88.69 | 88.14 | 85.59 |
The cash conversion cycle for ITT Inc has displayed fluctuations over the periods under consideration. The cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash inflows through sales.
Analyzing the data provided, we observe that the cash conversion cycle ranged from a low of 84.53 days on December 31, 2021 to a high of 109.61 days on March 31, 2023. During the more recent period, the cycle stood at around 91.01 days on December 31, 2024.
A rising cash conversion cycle generally indicates inefficiencies in managing working capital as the company takes longer to turn its resources into cash. Conversely, a declining cycle can suggest improved efficiency and liquidity management.
It is essential for ITT Inc to monitor and manage its cash conversion cycle effectively to ensure optimal utilization of resources and maintain healthy operational liquidity. By analyzing the trend and understanding the factors influencing the cycle, the company can take necessary steps to improve cash flow management and overall financial performance.