Martin Marietta Materials Inc (MLM)

Liquidity ratios

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Current ratio 3.35 1.99 2.69 3.34 1.70
Quick ratio 1.75 1.29 1.39 1.59 0.73
Cash ratio 1.09 0.74 0.34 0.42 0.03

Martin Marietta Materials, Inc. has shown a strong improvement in its liquidity ratios over the past five years. The current ratio has consistently remained above 1, indicating that the company has more than enough current assets to cover its short-term liabilities. In particular, the current ratio saw a significant increase from 1.70 in 2019 to 3.35 in 2023, reflecting a substantial improvement in the company's liquidity position.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also exhibited a positive trend over the same period. The quick ratio increased from 0.88 in 2019 to 1.81 in 2023, indicating that Martin Marietta Materials, Inc. has an increasing ability to meet its short-term obligations without relying on inventory.

Furthermore, the cash ratio, which measures the company's ability to cover its current liabilities using only its cash and cash equivalents, has shown considerable improvement over the years. The cash ratio rose from 0.19 in 2019 to 1.16 in 2023, indicating that Martin Marietta Materials, Inc. has significantly strengthened its cash position and is more capable of meeting its short-term obligations solely from its cash reserves.

Overall, the liquidity ratios of Martin Marietta Materials, Inc. demonstrate a positive trend, indicating an improving ability to meet short-term financial obligations and potentially seizing opportunities for growth and investment.


Additional liquidity measure

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cash conversion cycle days 86.67 82.89 86.07 93.06 89.42

The cash conversion cycle of Martin Marietta Materials, Inc. has fluctuated over the past five years. In 2023, the company's cash conversion cycle increased to 90.11 days from 84.21 days in 2022. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during the year.

Comparing to 2021, the cash conversion cycle was slightly higher in 2023, suggesting that the company may have faced challenges in managing its working capital efficiently. However, it is important to note that in 2023, the cash conversion cycle was lower than in 2020, when it peaked at 96.99 days.

Overall, Martin Marietta Materials, Inc. experienced fluctuations in its cash conversion cycle over the past five years. It is essential for the company to focus on improving its management of inventory and accounts receivable to shorten the cash conversion cycle and enhance its cash flow efficiency in the future.