MasterBrand Inc. (MBC)

The liquidity ratios of MasterBrand Inc. provide insights into the company's ability to meet its short-term obligations.

1. Current Ratio: This ratio indicates the company's ability to pay off its current liabilities with its current assets. MasterBrand Inc.'s current ratio ranged from 1.65 to 2.24 throughout the year 2024, showing that the company generally had more than enough current assets to cover its short-term liabilities. However, the ratio decreased towards the end of the year, possibly indicating a slight weakening in liquidity.

2. Quick Ratio: The quick ratio measures the company's ability to meet short-term obligations with its most liquid assets (cash, marketable securities, and receivables). MasterBrand Inc.'s quick ratio decreased from 1.21 to 0.79 during the year, suggesting a significant decrease in the company's ability to cover its current liabilities without relying on inventory, which may not be as easily convertible into cash.

3. Cash Ratio: The cash ratio specifically focuses on the company's ability to pay off its current liabilities using its cash and cash equivalents. MasterBrand Inc.'s cash ratio fluctuated between 0.29 and 0.57 in 2024, indicating that the company had a varying capacity to settle its short-term obligations with cash on hand.

Overall, while MasterBrand Inc. generally maintained healthy liquidity levels throughout 2024 with solid current ratios, the decreasing trend in quick and cash ratios towards the end of the year may raise concerns about the company's short-term liquidity position.

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Additional liquidity measure

The cash conversion cycle of MasterBrand Inc. fluctuated over the four quarters of 2024. The cycle was 47.70 days as of March 31, 2024, indicating the company takes around 47.70 days to convert its resources into cash. In the following quarter ending June 30, 2024, the cycle slightly increased to 49.05 days, suggesting a possible slowing down in the conversion process.

By the third quarter ending September 30, 2024, the cash conversion cycle further extended to 54.09 days, signifying a longer period needed to convert resources into cash compared to the previous quarters. However, the cycle improved in the last quarter of 2024, ending December 31, 2024, with a cycle of 44.97 days, indicating a quicker turnaround in converting resources into cash during that period.

Overall, fluctuations in the cash conversion cycle across the quarters of 2024 suggest variations in how efficiently MasterBrand Inc. manages its working capital, inventory, and accounts receivable, impacting its ability to generate cash from its operations. Tracking and analyzing these trends can provide insights into the company's liquidity management and operational efficiency.