MasTec Inc (MTZ)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.40 | 1.55 | 1.61 | 1.67 | 1.78 |
| Quick ratio | 0.67 | 0.71 | 0.78 | 0.87 | 0.76 |
| Cash ratio | 0.19 | 0.15 | 0.21 | 0.31 | 0.06 |
MasTec Inc's liquidity ratios have shown some fluctuations over the past five years. The current ratio, which reflects the company's ability to cover its short-term obligations with its current assets, has been on a declining trend, decreasing from 1.78 in 2019 to 1.40 in 2023. This downward trend suggests a potential weakening in the company's short-term liquidity position.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown a decrease over the years, from 0.76 in 2019 to 0.67 in 2023. This indicates that MasTec Inc may have relatively fewer liquid assets available to cover its short-term obligations.
The cash ratio, which provides the most conservative measure of liquidity by focusing solely on cash and cash equivalents, has fluctuated over the years. The ratio increased from 0.06 in 2019 to 0.31 in 2020 but then decreased to 0.19 in 2023. This suggests that MasTec Inc's cash position has been somewhat unstable.
Overall, the decreasing trend in the current and quick ratios, along with the fluctuating cash ratio, may raise some concerns about MasTec Inc's ability to meet its short-term obligations using its current liquid assets. It would be advisable for the company to closely monitor its liquidity position and take necessary steps to improve its short-term financial health.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 7.72 | 15.61 | 19.72 | 15.97 | 18.57 |
The cash conversion cycle of MasTec Inc has varied over the past five years. In 2023, the company's cash conversion cycle decreased significantly to 7.72 days from 15.61 days in 2022, indicating an improvement in its overall efficiency in managing cash flows from operations, inventory, and accounts receivables.
Looking back further, MasTec Inc's cash conversion cycle was 19.72 days in 2021, 15.97 days in 2020, and 18.57 days in 2019. The trend shows fluctuations in the company's cash conversion cycle, with a notable increase in 2021 followed by a decrease in 2022 and further improvement in 2023.
A lower cash conversion cycle suggests that MasTec Inc is able to quickly convert its investments in inventory and accounts receivable into cash, which is a positive sign of effective working capital management. The company's ability to shorten its cash conversion cycle over the years indicates improved liquidity and operational efficiency.