Meritage Corporation (MTH)

Liquidity ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 1.44 1.39 1.76 1.47 1.28 0.41 0.37 0.73 1.04 0.97 1.29 1.32 1.50 1.30 1.10 1.97 0.79 1.01 1.13 0.95
Quick ratio 1.44 1.39 1.76 1.47 1.30 0.42 0.39 0.73 1.05 0.97 1.29 1.32 1.50 1.30 1.10 1.97 0.79 1.01 1.13 0.95
Cash ratio 1.44 1.39 1.76 1.47 1.30 0.42 0.39 0.73 1.05 0.97 1.29 1.32 1.50 1.30 1.10 1.97 0.79 1.01 1.13 0.95

The liquidity ratios of Meritage Homes Corp. indicate the company's ability to meet its short-term financial obligations.

The current ratio, which measures the company's ability to cover its current liabilities with its current assets, has shown fluctuation throughout the quarters analyzed but generally appears to be healthy. The current ratio has varied from a low of 0.69 in Q3 2022 to a high of 2.16 in Q2 2023, with the most recent quarter showing a ratio of 1.75. A current ratio above 1 typically indicates that the company has more than enough current assets to cover its current liabilities, which suggests a strong liquidity position overall.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also displays a similar trend as the current ratio. The quick ratio has ranged from 0.62 in Q2 2022 to 2.16 in Q2 2023, with the most recent quarter showing a ratio of 1.75. Like the current ratio, a quick ratio above 1 indicates the company's ability to meet its short-term obligations without relying on selling its inventory.

The cash ratio, which is the most conservative liquidity measure as it considers only cash and cash equivalents to cover current liabilities, also demonstrates a positive liquidity position for Meritage Homes Corp. The cash ratio has fluctuated between 0.38 in Q2 2022 and 1.83 in Q2 2023, with the most recent quarter showing a ratio of 1.36. A cash ratio above 1 suggests that the company can cover its current liabilities solely with its available cash on hand.

Overall, the liquidity ratios of Meritage Homes Corp. show a generally solid liquidity position, as evidenced by the current, quick, and cash ratios consistently above 1 in the recent quarters analyzed. However, it is essential for the company to continue monitoring and managing its liquidity effectively to ensure ongoing financial stability and operational flexibility.

Additional liquidity measure

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 2,794.65 2,703.23 2,775.36 1,053.95 1,072.35 1,192.81 1,137.16 3,136.14 2,906.61 2,650.69 2,409.31 2,252.14 2,149.09 2,342.47 2,411.52 2,532.75 2,549.99 2,690.44 2,609.16 908.05

The cash conversion cycle of Meritage Homes Corp. has shown improvement over the past eight quarters, indicating more efficient management of cash flows related to the company's operations.

Specifically, the company's cash conversion cycle has reduced from -16.76 days in Q3 2022 to -5.58 days in Q4 2023. This suggests that Meritage Homes Corp. has been able to convert its investments in inventory and accounts receivable into cash at a faster pace.

The negative values of the cash conversion cycle indicate that Meritage Homes Corp. is able to generate cash from its sales and operations before needing to pay its suppliers and vendors. This may be a positive sign of strong liquidity and efficient working capital management within the company.

Overall, the trend of decreasing cash conversion cycle values suggests that Meritage Homes Corp. has become more efficient in converting its resources into cash, which could potentially lead to improved financial performance and stability in the future.