MGP Ingredients Inc (MGPI)

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 5.91 6.46 6.44 6.32 4.51 5.59 4.39 4.65 4.31 4.37 4.53 4.68 4.13 4.07 4.24 4.17 4.17 4.98 5.54 5.86
Quick ratio 0.27 0.25 0.25 0.24 0.16 0.31 0.19 0.31 0.45 0.50 0.40 0.32 0.24 0.19 0.45 0.41 0.41 0.45 0.30 1.03
Cash ratio 0.27 0.25 0.25 0.24 0.16 0.31 0.19 0.31 0.45 0.50 0.40 0.32 0.24 0.19 0.45 0.41 0.41 0.45 0.30 1.03

The current ratio for MGP Ingredients Inc has been relatively stable over the past few years, ranging from 4.17 to 6.46. The company's ability to meet its short-term obligations with its current assets improved in the most recent periods, reaching a high of 6.46 as of September 30, 2024.

On the other hand, the quick ratio, which measures the company's ability to cover its short-term obligations with its most liquid assets, has shown more volatility. It ranged from 0.16 to 0.50 over the same period. This ratio indicates that MGP Ingredients Inc may have had difficulty meeting its immediate short-term liabilities in certain periods, particularly in December 2023 when the quick ratio was at its lowest.

The cash ratio, which is a stricter measure of liquidity, has also shown fluctuations, ranging from 0.16 to 0.50. This ratio indicates the company's capacity to cover its current liabilities with its cash and cash equivalents. MGP Ingredients Inc's cash ratio improved notably in September 2022 but declined again in December 2023.

Overall, while MGP Ingredients Inc has maintained a strong current ratio, indicating a healthy balance between current assets and liabilities, the quick and cash ratios suggest that the company may have faced challenges in meeting its short-term obligations using its most liquid assets in certain periods.


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 319.20 308.21 270.82 250.52 238.06 235.87 235.11 209.80 199.88 195.10 202.17 199.36 209.86 228.16 247.10 167.32 173.46 174.65 184.82 179.92

The cash conversion cycle of MGP Ingredients Inc has displayed fluctuations over the periods analyzed. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to September 30, 2021, the cash conversion cycle decreased steadily from 179.92 days to 228.16 days. This decreasing trend indicates that the company was improving its efficiency in managing its working capital during this period.

However, between September 30, 2021, and December 31, 2024, the cash conversion cycle increased significantly, reaching its peak at 319.20 days. This prolonged cycle suggests that the company may have been facing challenges in converting its investments into cash efficiently during these quarters.

The cash conversion cycle is an important metric as it reflects the company's ability to manage its liquidity, inventory, and receivables effectively. A shorter cash conversion cycle is generally preferable as it signifies that the company is able to generate cash quickly from its operations.

Overall, MGP Ingredients Inc should focus on optimizing its cash conversion cycle to ensure a healthy balance between managing working capital efficiently and driving revenue growth in the long term.