Knowles Cor (KN)

Liquidity ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 2.61 3.62 3.47 3.06 3.66 2.87 2.54 2.68 2.29 1.39 1.28 1.49 1.41 3.15 1.91 3.33 2.56 2.83 2.85 2.71
Quick ratio 1.35 1.81 1.59 1.29 1.85 1.30 1.18 1.36 1.30 0.86 0.70 0.98 0.94 1.92 1.16 2.02 1.57 1.67 1.49 1.35
Cash ratio 0.53 0.70 0.50 0.42 0.49 0.32 0.32 0.35 0.41 0.45 0.31 0.60 0.50 1.01 0.73 1.11 0.52 0.50 0.42 0.32

Knowles Corp's liquidity ratios show a fluctuating trend over the past eight quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown some variability, ranging from a low of 2.54 in Q2 2022 to a high of 3.66 in Q4 2022. Generally, the current ratio has been above 3, indicating that the company has a strong ability to meet its short-term obligations.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, shows a similar pattern of fluctuations. Knowles Corp's quick ratio has varied between 1.27 in Q2 2022 and 1.95 in Q4 2022. While the quick ratio has been above 1 in most quarters, suggesting that the company can cover its short-term liabilities without relying on inventory, it did dip below this threshold in Q2 2022.

The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, also presents some variability. Knowles Corp's cash ratio has fluctuated between 0.41 in Q3 2022 and 0.79 in Q3 2023. The company's ability to cover its short-term liabilities with cash on hand has generally been above 0.5, indicating a reasonable level of liquidity.

Overall, while there have been fluctuations in Knowles Corp's liquidity ratios over the past eight quarters, the company has maintained a strong liquidity position with current and quick ratios consistently above 1 and generally above 3. This suggests that Knowles Corp has the ability to meet its short-term obligations without significant liquidity constraints.

Additional liquidity measure

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 191.35 177.34 184.45 172.83 165.87 164.00 145.64 129.49 106.28 111.43 113.02 96.21 107.22 129.32 111.68 109.81 105.70 125.39 125.62 121.23

The cash conversion cycle of Knowles Corp has shown fluctuations over the past eight quarters. The trend indicates that the company takes an average of 171.87 days to convert its investments in inventory into cash receipts from customers.

In the most recent quarter (Q4 2023), the cash conversion cycle increased to 191.40 days, reflecting a lengthening of the time period required to convert raw materials into finished goods and eventually into cash. This may indicate challenges in efficient inventory management or delays in collecting receivables from customers.

Comparing to the corresponding quarter a year ago, the cash conversion cycle has increased significantly by 24.61 days, suggesting potential issues in the company's working capital management efficiency. This longer cash conversion cycle could indicate possible inventory management problems, slowdowns in production, or difficulties in collecting payments from customers.

Overall, monitoring and managing the cash conversion cycle effectively is crucial for Knowles Corp to ensure optimal utilization of its resources and maintain healthy liquidity levels. The company should focus on streamlining its operations, improving inventory turnover, and implementing effective receivables management practices to shorten its cash conversion cycle and enhance overall financial performance.