Leggett & Platt Incorporated (LEG)

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 1.49 1.87 1.99 2.08 2.02 2.07 1.57 1.58 1.55 1.48 1.71 1.80 1.65 1.60 1.82 2.08 1.66 1.74 1.89 1.91
Quick ratio 0.84 1.03 1.08 1.02 0.96 0.99 0.75 0.76 0.73 0.70 0.85 0.94 0.91 0.94 1.01 1.26 0.90 1.00 1.10 1.07
Cash ratio 0.29 0.27 0.29 0.36 0.33 0.23 0.20 0.24 0.27 0.18 0.21 0.34 0.35 0.26 0.27 0.59 0.27 0.26 0.32 0.30

Leggett & Platt, Inc.'s liquidity ratios have exhibited some fluctuations in recent quarters.

The current ratio, which indicates the company's ability to meet short-term obligations with its current assets, has decreased from 2.02 in Q4 2022 to 1.49 in Q4 2023. Although the current ratio has decreased, it generally remains above 1, indicating that the company has more than enough current assets to cover its current liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also shows a decrease from 1.09 in Q4 2022 to 0.84 in Q4 2023. This decline suggests that the company may have a lower ability to pay off its short-term obligations quickly without relying on inventory.

The cash ratio, which provides the most conservative view of liquidity by considering only cash and cash equivalents, has shown some variability but overall appears to be stable, ranging from 0.26 to 0.42 over the past eight quarters.

In summary, while the current ratio indicates that Leggett & Platt, Inc. generally has sufficient current assets to cover its current liabilities, the decreasing trend in both the current and quick ratios may warrant further analysis to determine the underlying reasons for the decreased liquidity positions. It will be crucial for the company to monitor and manage its liquidity effectively to ensure it can meet its short-term financial obligations.

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 76.33 84.43 86.50 75.90 76.31 89.08 85.02 84.87 77.90 84.89 79.77 77.31 62.37 64.43 71.44 66.64 61.70 72.09 78.79 80.83

The cash conversion cycle for Leggett & Platt, Inc. provides insight into the efficiency of the company's working capital management. A lower cash conversion cycle indicates that the company is able to convert its investment in inventory and accounts receivable into cash more quickly.

In the case of Leggett & Platt, Inc., the trend in the cash conversion cycle over the past eight quarters shows some fluctuations. In Q4 2023, the cash conversion cycle improved to 75.96 days compared to the previous quarter, indicating a more efficient working capital management. However, the improvement was not consistent, as there were fluctuations in the cycle in the preceding quarters.

The company experienced relatively higher cash conversion cycles in Q3 2022, Q4 2022, and Q2 2023, which could indicate potential issues with managing inventory and accounts receivable during those periods. The decreases in the cycle in Q1 2023 and Q4 2023 suggest improvements in managing working capital efficiency.

Overall, Leggett & Platt, Inc. should focus on maintaining a lower and more consistent cash conversion cycle to optimize its cash flow and working capital efficiency. Monitoring and improving inventory turnover and accounts receivable collection processes could help in achieving this goal.