KBR Inc (KBR)
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 | 1.05 | 1.07 | 1.10 | 1.10 | 1.05 | 0.98 | 1.05 | 0.99 | 0.96 | 1.24 | 1.26 | 1.21 | 1.15 | 1.19 | 1.20 | 1.15 | 1.12 | 1.54 | 1.27 | 1.22 |
| Quick ratio | 0.82 | 0.93 | 0.87 | 0.85 | 0.84 | 0.66 | 0.71 | 0.79 | 0.74 | 1.00 | 1.04 | 0.99 | 0.96 | 1.00 | 0.98 | 0.93 | 0.93 | 1.34 | 1.07 | 1.01 |
| Cash ratio | 0.20 | 0.33 | 0.27 | 0.21 | 0.19 | 0.16 | 0.24 | 0.23 | 0.21 | 0.34 | 0.35 | 0.28 | 0.20 | 0.31 | 0.33 | 0.31 | 0.30 | 0.66 | 0.42 | 0.35 |
Based on the provided data for KBR Inc, let's analyze the liquidity ratios:
1. Current Ratio:
- The current ratio for KBR Inc fluctuated over the periods but generally maintained a level above 1, indicating that the company had more current assets than current liabilities to cover its short-term obligations.
- The ratio peaked at 1.54 on September 30, 2020, indicating a strong ability to meet current liabilities, but decreased to 0.96 by December 31, 2022, raising concerns about liquidity.
2. Quick Ratio:
- The quick ratio, which excludes inventory from current assets, provides a more stringent measure of liquidity. KBR Inc's quick ratio ranged from 0.66 to 1.34 during the periods.
- The company generally maintained a quick ratio above 1 until December 31, 2022, signaling its ability to meet short-term obligations without relying on the sale of inventory.
3. Cash Ratio:
- The cash ratio, the most conservative liquidity measure that considers only cash and cash equivalents, varied between 0.16 and 0.66 for KBR Inc.
- The company demonstrated a decreasing trend in the cash ratio over time, indicating potentially reduced ability to cover current liabilities solely with cash on hand.
In summary, while KBR Inc maintained current ratios above 1 for most periods, indicating a reasonable liquidity position, the decreasing trends in the quick and cash ratios from 2022 onwards suggest a potential decline in the company's ability to meet short-term obligations without relying on inventory or cash reserves. Monitoring these ratios closely can help assess KBR Inc's liquidity health and ability to manage short-term financial demands.
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 | 13.26 | 15.76 | 14.53 | 16.16 | 21.06 | 17.89 | 16.17 | 16.08 | 16.95 | 16.23 | 23.06 | 18.60 | 18.67 | 13.20 | 15.75 | 14.12 | 17.22 | 19.98 | 18.24 | 18.74 |
The cash conversion cycle of KBR Inc has shown some fluctuations over the observed period. The company's cash conversion cycle measures the time it takes to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 13.20 days to a high of 23.06 days. Notably, the cycle decreased from 18.74 days on March 31, 2020, to 14.12 days on March 31, 2021, reflecting an improvement in efficiency. However, there was an increase observed, with the cycle reaching 23.06 days on June 30, 2022.
Subsequently, the cash conversion cycle decreased to 13.26 days by December 31, 2024. Overall, it is essential for KBR Inc to manage its cash conversion cycle effectively to ensure the optimal utilization of resources and maintain healthy cash flows.