Kadant Inc (KAI)

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 2.31 2.29 2.25 2.05 2.05 2.04 2.04 1.99 1.95 1.88 1.85 1.80 1.73 1.89 2.52 2.11 2.15 2.22 1.94 2.21
Quick ratio 1.24 1.19 1.85 1.04 2.10 2.01 0.95 0.36 0.97 0.34 0.36 0.40 0.93 0.42 0.46 0.45 0.49 0.42 0.39 0.46
Cash ratio 0.50 0.43 1.11 0.37 1.48 1.36 0.31 0.36 0.36 0.34 0.36 0.40 0.40 0.42 0.46 0.45 0.49 0.42 0.39 0.46

The current ratio for Kadant Inc has shown some fluctuations over the past few years, ranging from a low of 1.73 as of December 31, 2021, to a high of 2.31 as of December 31, 2024. This ratio measures the company's ability to cover its short-term liabilities with its current assets, with a ratio above 1 indicating that Kadant Inc has more current assets than current liabilities.

In terms of the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, Kadant Inc has experienced variability in its liquidity position. The quick ratio ranged from a low of 0.34 as of September 30, 2022, to a high of 2.10 as of December 31, 2023. A quick ratio above 1 suggests that the company can cover its short-term liabilities without relying on the sale of inventory.

The cash ratio, which specifically looks at the company's ability to cover its current liabilities with its cash and cash equivalents, also exhibited fluctuations in Kadant Inc's liquidity. The cash ratio ranged from a low of 0.31 as of June 30, 2023, to a high of 1.48 as of December 31, 2023. A cash ratio above 1 indicates that the company can meet its short-term obligations solely with its cash reserves.

Overall, while Kadant Inc's liquidity ratios have fluctuated over the analyzed periods, the company generally maintained a healthy liquidity position as indicated by current, quick, and cash ratios consistently above 1. It is important for the company to continue monitoring and managing its liquidity effectively to ensure it can meet its short-term obligations while seeking opportunities for growth and investment.

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 88.13 105.51 106.41 108.21 102.00 109.55 113.43 58.10 120.01 65.58 65.54 51.39 94.75 62.85 58.47 65.43 67.89 68.24 60.15 50.71

The cash conversion cycle for Kadant Inc has shown fluctuations over the periods analyzed. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Analyzing the data provided, we observe that Kadant Inc's cash conversion cycle ranged from a low of 50.71 days on March 31, 2020, to a high of 120.01 days on December 31, 2022. A shorter cash conversion cycle suggests that the company is efficient in managing its working capital and converting its inventory into sales and subsequently into cash.

During the period under review, we can see some spikes in the cash conversion cycle, such as the peak reached on December 31, 2022, which may indicate potential inefficiencies in managing inventory, accounts receivable, or accounts payable.

Overall, it is essential for Kadant Inc to closely monitor its cash conversion cycle to ensure optimal management of its working capital and efficient operations. By actively managing inventory levels, accounts receivable collection, and accounts payable terms, the company can strive to shorten its cash conversion cycle, improve cash flow, and enhance overall financial performance.