Mohawk Industries Inc (MHK)

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 2.06 2.03 1.92 1.83 1.78 1.73 1.78 1.83 1.92 1.50 1.51 1.44 1.78 1.95 1.87 1.85 2.26 2.16 2.53 1.61
Quick ratio 0.25 0.15 0.17 0.21 0.20 0.16 0.17 0.22 0.22 0.11 0.12 0.14 0.20 0.39 0.45 0.45 0.57 0.50 0.39 0.09
Cash ratio 0.25 0.15 0.17 0.21 0.20 0.16 0.17 0.22 0.22 0.11 0.12 0.14 0.20 0.39 0.45 0.45 0.57 0.50 0.39 0.09

Mohawk Industries Inc's current ratio has shown some fluctuations over the past few years, ranging from a high of 2.53 in June 2020 to a low of 1.44 in March 2022. The current ratio measures the company's ability to cover its short-term liabilities with its current assets. Generally, a current ratio above 1 indicates that the company can meet its short-term obligations.

The quick ratio, which excludes inventory from current assets, has also varied. It reached a high of 0.57 in December 2020 but dropped to 0.11 in September 2022 before gradually increasing to 0.25 by December 2024. The quick ratio provides a more stringent measure of a company's liquidity than the current ratio, as it reflects the ability to cover current liabilities with more liquid assets.

The cash ratio, which is the most conservative liquidity measure, stayed relatively stable between 0.11 and 0.25 over the period analyzed. This ratio indicates how well a company can cover its current liabilities with its cash and cash equivalents alone.

Overall, while Mohawk Industries Inc's liquidity ratios have experienced some fluctuations, the company has generally maintained a reasonable level of liquidity to meet its short-term obligations. A current ratio above 1, coupled with an increasing quick ratio and cash ratio, suggests that the company has a solid financial position in terms of liquidity.

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 113.17 118.31 116.16 111.39 110.59 107.54 110.10 113.97 115.96 121.38 121.40 110.95 110.06 103.52 98.67 99.43 98.05 95.78 100.53 112.13

The cash conversion cycle of Mohawk Industries Inc has shown fluctuations over the past few years. The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, is an important metric for assessing the efficiency of the company's working capital management.

From the data provided, we can see that Mohawk Industries Inc's cash conversion cycle has ranged from a low of 95.78 days in September 2020 to a high of 121.40 days in June 2022. A lower cash conversion cycle indicates that the company is able to convert its resources into cash more quickly, which is generally seen as a positive indicator of operational efficiency.

It is worth noting that there seems to be a slight increasing trend in the cash conversion cycle from 2022 to 2024, with the cycle ranging between 110.10 days to 118.31 days. This could indicate potential challenges in managing working capital efficiently or fluctuations in sales and inventory management.

Overall, it is important for Mohawk Industries Inc to closely monitor and manage its cash conversion cycle to ensure optimal working capital management and operational efficiency in converting resources into cash effectively. Any prolonged increase in the cash conversion cycle could potentially signal inefficiencies in the company's operations that require attention and corrective actions.