Jacobs Solutions Inc. (J)

Jacobs Solutions Inc.'s liquidity ratios show fluctuations over the past five years. The current ratio, measuring short-term liquidity, has generally been above 1, indicating that the company has had sufficient current assets to cover its current liabilities. However, it has decreased from 1.54 in 2020 to 1.20 in 2024, which may indicate some weakening of liquidity position.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, shows more variability. It was below 1 in 2023 and 2024, suggesting that the company may have had difficulty meeting its short-term obligations without relying on inventory.

The cash ratio, which focuses solely on cash and cash equivalents compared to current liabilities, shows a similar pattern as the quick ratio, with a significant increase from 2023 to 2024. This could indicate an improvement in the company's ability to cover its short-term liabilities using its cash reserves.

Overall, Jacobs Solutions Inc. should closely monitor its liquidity ratios, particularly the decreasing trend in the current ratio, to ensure it can continue to meet its short-term obligations effectively. Further analysis of cash management and inventory levels may be warranted to address any underlying issues affecting liquidity.

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Additional liquidity measure

The cash conversion cycle of Jacobs Solutions Inc. has fluctuated over the past five years. In Sep 30, 2024, the cash conversion cycle increased to 54.93 days from 32.55 days in Sep 30, 2023. This indicates that it took Jacobs Solutions Inc. a longer time to convert its investments in inventory and accounts receivable into cash in the most recent period.

Comparing this to the historical trend, the cash conversion cycle was relatively high in Sep 30, 2022 (57.69 days) compared to the previous year (55.02 days in Sep 30, 2021) but was slightly lower than the cycle observed in Sep 30, 2020 (56.34 days).

Overall, the fluctuation in the cash conversion cycle for Jacobs Solutions Inc. suggests variable efficiency in managing its working capital and operations over the years. It is important for the company to analyze the underlying factors contributing to these fluctuations to improve its working capital management and enhance overall financial performance.