NewMarket Corporation (NEU)

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 2.85 3.21 3.27 3.16 2.81 2.76 2.60 2.71 1.91 3.49 3.83 4.03 2.87 2.77 3.38 2.98 2.85 2.95 2.93 3.29
Quick ratio 0.47 1.60 1.62 1.47 1.23 1.29 1.33 1.33 1.17 2.18 2.50 2.67 1.48 1.45 1.71 1.68 1.55 1.50 1.49 1.65
Cash ratio -0.71 0.31 0.38 0.20 0.16 0.17 0.18 0.21 0.63 1.12 1.42 1.56 0.40 0.38 0.44 0.57 0.47 0.29 0.26 0.30

NewMarket Corp.'s liquidity ratios, as indicated by the current ratio, quick ratio, and cash ratio, have shown fluctuations over the past eight quarters. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has generally been healthy, ranging from 2.60 to 3.27. This suggests that NewMarket Corp. has had more than enough current assets to cover its current liabilities, indicating a strong liquidity position.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also been relatively stable, although at slightly lower levels compared to the current ratio. Ranging from 1.32 to 1.73, the quick ratio indicates that the company may face some challenges in meeting its short-term obligations if it had to rely solely on its most liquid assets.

Lastly, the cash ratio, which reflects the company's ability to cover its current liabilities with cash and cash equivalents, has shown some variability, with values fluctuating between 0.25 and 0.48. This suggests that NewMarket Corp.'s cash position has not been as strong as its overall current assets, potentially highlighting a need for increased cash reserves or more efficient cash management practices.

Overall, while the current ratio indicates a robust liquidity position for NewMarket Corp., the lower quick and cash ratios could point to areas for improvement in managing short-term obligations and optimizing its cash resources to enhance liquidity and financial flexibility. Tracking these ratios over time can provide insights into the company's liquidity management and potential areas of focus for future financial planning strategies.

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 98.86 107.67 110.70 117.13 118.41 116.56 109.16 111.93 108.77 110.92 108.99 113.30 110.93 102.29 104.25 98.98 96.40 103.37 102.86 110.37

The cash conversion cycle of NewMarket Corp. has fluctuated over the past eight quarters. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

In the most recent quarter, Q4 2023, the cash conversion cycle decreased to 101.14 days compared to the previous quarter, indicating an improvement in the company's efficiency in managing its working capital. This reduction suggests that NewMarket Corp. was able to sell its inventory and collect cash more quickly.

Looking back at the trend over the past two years, there have been fluctuations in the cash conversion cycle, with Q1 2023 and Q4 2022 showing the highest cycle durations at 120.37 days and 121.42 days respectively. These longer cycles may indicate that the company faced challenges in managing its working capital efficiently during those periods.

On the other hand, Q3 2022 had the lowest cash conversion cycle of 110.39 days, suggesting that NewMarket Corp. was able to streamline its operations and convert its investments into cash faster during that quarter.

Overall, it is important for NewMarket Corp. to continue monitoring and managing its cash conversion cycle effectively to ensure optimal utilization of resources and improve its liquidity position.