Martin Marietta Materials Inc (MLM)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 2.50 | 3.35 | 1.99 | 2.69 | 3.34 |
| Quick ratio | 0.66 | 1.09 | 0.74 | 0.34 | 0.42 |
| Cash ratio | 0.66 | 1.09 | 0.74 | 0.34 | 0.42 |
Based on the data provided for Martin Marietta Materials Inc, the current ratio has fluctuated over the years, indicating the company's ability to meet its short-term obligations. The current ratio was highest in December 31, 2020, at 3.34, and lowest in December 31, 2022, at 1.99. However, it rebounded in December 31, 2023, to 3.35 and then decreased slightly to 2.50 in December 31, 2024.
In terms of the quick ratio, the company's ability to cover immediate liabilities with its most liquid assets improved significantly from December 31, 2020, to December 31, 2023, before decreasing slightly by December 31, 2024.
The trend in the cash ratio closely mirrors that of the quick ratio, indicating that Martin Marietta Materials Inc has a stable cash position relative to its current liabilities, with a notable improvement from December 31, 2020, to December 31, 2023.
Overall, despite some fluctuations, the liquidity ratios of Martin Marietta Materials Inc suggest that the company has maintained a satisfactory liquidity position over the years, with the ability to meet its short-term obligations using a combination of current assets. However, management may need to monitor the ratios closely to ensure the company's liquidity remains at optimal levels.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 87.37 | 75.89 | 67.32 | 67.57 | 74.43 |
The cash conversion cycle of Martin Marietta Materials Inc has shown a fluctuating trend over the past five years. In 2020, the company's cash conversion cycle stood at 74.43 days. Over the subsequent years, the cycle decreased to 67.57 days in 2021 and slightly decreased further to 67.32 days in 2022. However, there was a reversal in the trend in 2023 as the cycle increased to 75.89 days. The cycle experienced a significant increase in 2024, reaching 87.37 days.
Overall, the company's cash conversion cycle has shown some variability, indicating potential changes in the efficiency of its operations in managing cash, inventory, and receivables. A decreasing cycle suggests improved efficiency in converting resources into cash, while an increasing cycle may reflect challenges in managing working capital effectively. This trend in the cash conversion cycle requires further analysis to understand the underlying factors influencing the company's liquidity and operational performance.