NVR Inc (NVR)
Liquidity ratios
| Dec 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 5.07 | 4.92 | 3.82 | 4.25 | 4.25 | 6.45 | 7.20 | 5.75 | 5.64 | 3.34 | 5.04 | 4.97 | 5.95 | 6.18 | 5.89 | 5.73 | 3.33 | 6.08 | 5.80 | 4.82 |
| Quick ratio | 2.32 | 2.05 | 2.01 | 2.47 | 2.63 | 3.59 | 3.79 | 3.24 | 3.09 | 1.40 | 1.83 | 2.33 | 3.20 | 3.45 | 3.14 | 3.22 | 3.33 | 3.34 | 2.96 | 1.74 |
| Cash ratio | 2.32 | 2.05 | 2.01 | 2.47 | 2.63 | 3.59 | 3.79 | 3.24 | 3.09 | 1.40 | 1.83 | 2.33 | 3.20 | 3.45 | 3.14 | 3.22 | 3.33 | 3.34 | 2.96 | 1.74 |
The current ratio, which measures NVR Inc's ability to cover short-term liabilities with its current assets, shows a generally positive trend over the years, starting at 4.82 in March 2020 and fluctuating between 3.33 and 7.20 until December 2024. This indicates that the company has, on average, more than sufficient current assets to meet its short-term obligations.
Similarly, the quick ratio, a more stringent measure of liquidity excluding inventory from current assets, also demonstrates a favorable pattern over the years, ranging from 1.40 to 3.79. This suggests that NVR Inc has a healthy ability to cover its short-term liabilities without relying on the sale of inventory.
Additionally, the cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) relative to current liabilities, showcases a consistent capability to cover short-term obligations throughout the period, with values ranging from 1.40 to 3.79. This signifies that the company has ample cash reserves to meet its immediate payment requirements.
Overall, based on the liquidity ratios analysis, NVR Inc appears to maintain strong liquidity positions over the years, indicating its ability to manage short-term financial obligations effectively and potentially withstand unforeseen financial challenges.
Additional liquidity measure
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 148,035.69 | 21,569.40 | 21,708.49 | 16,456.17 | 12,702.63 | 34,583.70 | 24,143.97 | 23,039.15 | 22,920.23 | 27,528.47 | 31,888.94 | 30,122.22 | 27,300.28 | 18,616.33 | 19,901.09 | 18,521.17 | 17,224.35 | 174,218.83 | 126,279.60 | 114,845.05 |
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. For NVR Inc, the cash conversion cycle has displayed significant fluctuations over the periods analyzed.
At the end of December 2023, NVR Inc had a remarkably low cash conversion cycle of 12,702.63 days, indicating that the company efficiently converted its investments into cash within a short period. However, this efficiency deteriorated rapidly, and by September 2024, the cash conversion cycle had increased to 148,035.69 days, signifying a considerable delay in converting investments into cash flows.
The cash conversion cycle peaked in September 2020 at 174,218.83 days, suggesting a significant slowdown in the company's cash conversion efficiency during that period. Subsequently, the cycle displayed fluctuations but generally improved by the end of 2024 compared to the previous high levels observed.
Overall, the cash conversion cycle trend for NVR Inc indicates fluctuations in operational efficiency in managing its working capital and converting resources into cash over the periods analyzed. Further analysis of the company's inventory management, accounts receivable, and accounts payable processes may provide insights into the factors driving these fluctuations in the cash conversion cycle.