MDU Resources Group Inc (MDU)

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 0.98 1.15 1.21 1.43 1.27 1.29 1.36 1.29 1.36 1.38 1.35 1.35 1.42 1.46 1.55 1.47 1.39 1.41 1.40 1.67
Quick ratio 0.07 0.08 0.08 0.10 0.05 0.26 0.26 0.06 0.05 0.05 0.05 0.06 0.05 0.05 0.06 0.06 0.06 0.06 0.06 0.14
Cash ratio 0.07 0.08 0.08 0.10 0.05 0.26 0.26 0.06 0.05 0.05 0.05 0.06 0.05 0.05 0.06 0.06 0.06 0.06 0.06 0.14

MDU Resources Group Inc's liquidity ratios, namely the current ratio, quick ratio, and cash ratio, have shown varying trends over the years.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally stayed above 1, indicating the company's ability to pay off its current liabilities. However, there has been a slight decline from 1.67 as of March 31, 2020, to 0.98 as of December 31, 2024, which may indicate a potential concern about the company's liquidity position.

The quick ratio, also known as the acid-test ratio, provides a more conservative measure of the company's liquidity by excluding inventory from current assets. MDU Resources Group Inc's quick ratio has fluctuated over the years, with a notable decrease from 0.26 as of June 30, 2023, to 0.07 as of December 31, 2024. This decreasing trend suggests a potential weakness in the company's ability to cover its short-term obligations without relying on inventory.

Similarly, the cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, has fluctuated over the years. The ratio decreased significantly from 0.26 as of June 30, 2023, to 0.07 as of December 31, 2024, indicating a potential decrease in the company's ability to cover its current liabilities with its readily available cash.

Overall, while MDU Resources Group Inc has maintained current ratios above 1, suggesting a satisfactory ability to meet its short-term obligations, the declining trends in the quick ratio and cash ratio raise concerns about the company's liquidity position and its ability to meet obligations without relying on inventory or cash reserves. It may be prudent for the company to closely monitor its liquidity position and consider strategies to improve its short-term financial health.

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 5.65 8.94 6.86 5.66 7.62 6.13 3.94 25.37 24.27 26.55 28.59 28.73 26.42 25.02 25.41 25.78 23.69 23.21 24.55 24.83

The cash conversion cycle of MDU Resources Group Inc has exhibited fluctuations over the period under review. Starting at around 24-26 days in 2020 and 2021, it increased to over 28 days by March 2022 and June 2022, indicating a longer cycle to convert investments in inventory and other resources into cash flows.

There was a significant decrease by June 2023 to around 4 days, suggesting improved efficiency in managing working capital and converting inventory to sales. This trend continued until December 2024, with the cycle fluctuating between 5-9 days.

Overall, a lower cash conversion cycle indicates better liquidity and efficiency in managing cash flows, while a higher cycle may suggest potential inefficiencies in converting resources into cash. The decreasing trend after 2022 could indicate improvements in working capital management and overall operational efficiency for MDU Resources Group Inc.