NewJersey Resources Corporation (NJR)
Liquidity ratios
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.62 | 0.60 | 0.70 | 0.70 | 0.66 | 0.78 | 0.87 | 0.95 | 0.68 | 0.76 | 0.63 | 0.69 | 0.60 | 0.84 | 1.29 | 1.17 | 1.17 | 0.58 | 0.61 | 0.86 |
| Quick ratio | 0.13 | 0.16 | 0.32 | 0.27 | 0.13 | 0.17 | 0.36 | 0.44 | 0.20 | 0.30 | 0.37 | 0.29 | 0.19 | 0.33 | 0.77 | 0.51 | 0.47 | 0.21 | 0.31 | 0.40 |
| Cash ratio | 0.00 | 0.00 | 0.01 | 0.00 | 0.00 | 0.00 | 0.04 | 0.00 | 0.00 | 0.03 | 0.02 | 0.00 | 0.00 | 0.01 | 0.14 | 0.04 | 0.22 | 0.05 | 0.03 | 0.02 |
NewJersey Resources Corporation's liquidity ratios, including the current ratio, quick ratio, and cash ratio, reflect the company's ability to meet its short-term liabilities with its current assets.
The current ratio has been fluctuating over the periods, ranging from 0.58 to 1.29. A current ratio below 1 suggests that the company may have difficulty meeting its short-term obligations with its current assets alone. However, an excessively high current ratio may indicate that the company has too many idle assets. NewJersey Resources Corporation’s current ratio has generally been below 1, indicating potential liquidity concerns.
The quick ratio, which is a more stringent measure of liquidity, has also shown fluctuations over time, ranging from 0.13 to 0.77. This ratio excludes inventory from current assets since inventory may not be easily converted to cash in the short term. A quick ratio below 1 suggests that the company may struggle to meet its short-term obligations without relying on the sale of inventory.
The cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has also varied, ranging from 0.00 to 0.22. A cash ratio of 0.00 indicates that the company has minimal cash on hand relative to its current liabilities.
Overall, the liquidity ratios of NewJersey Resources Corporation indicate a challenging liquidity position, as reflected in consistently low current and quick ratios over the periods analyzed. This suggests that the company may need to improve its liquidity management to ensure it can meet its short-term financial obligations effectively.
Additional liquidity measure
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 1,390.84 | 435.09 | -296.04 | 2,586.51 | 1,616.99 | 1,372.59 | -264.35 | 3,611.71 | 2,999.77 | 399.94 | -39.99 | 214.44 | 1.23 | -40.83 | -993.50 | 2,257.11 | 1,477.81 | 27.03 | 40.16 | 47.90 |
The cash conversion cycle of NewJersey Resources Corporation has exhibited significant fluctuations over the past few quarters. The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales, is a critical indicator of efficiency in working capital management.
Looking at the data provided, we can see that the cash conversion cycle was consistently negative from March 2021 to December 2021, indicating that the company was able to generate cash from its operations before needing to pay its suppliers. This could signify efficient inventory turnover and quick collection of accounts receivable during this period.
However, from March 2022 to December 2023, the cash conversion cycle turned positive, with substantial increases in the number of days it took for the company to convert its investments into cash inflows. This indicates a potential decline in efficiency in managing working capital during these periods.
The cash conversion cycle experienced a sharp improvement in the most recent quarters, with negative values in March 2024 and September 2024. This suggests that the company has once again become more efficient in managing its working capital and turning investments into cash inflows more rapidly.
Overall, the drastic fluctuations in the cash conversion cycle of NewJersey Resources Corporation indicate varying levels of efficiency in working capital management over the analyzed periods. It will be important for the company to continue monitoring and improving its processes to maintain a healthy cash conversion cycle and ensure optimal use of resources.