nVent Electric PLC (NVT)

Liquidity ratios

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 Sep 30, 2019
Current ratio 2.18 1.99 1.82 1.97 2.09 2.08 1.89 1.88 1.75 1.64 1.43 1.56 1.68 1.72 1.70 1.99 2.29 2.16 1.73 1.84
Quick ratio 0.39 0.28 0.23 0.15 0.20 0.48 0.44 0.29 0.08 0.07 0.07 0.07 0.18 0.21 0.26 0.37 0.59 0.45 0.22 0.11
Cash ratio 0.42 0.31 0.25 0.17 0.22 0.50 0.46 0.30 0.09 0.09 0.08 0.08 0.19 0.23 0.27 0.39 0.61 0.46 0.23 0.11

nVent Electric PLC's liquidity ratios have fluctuated over the periods indicated in the table.

The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has generally improved over time, with the ratio ranging from 1.43 to 2.18. This indicates that nVent Electric PLC has been able to meet its short-term obligations more comfortably in recent periods.

On the other hand, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has shown more variability, ranging from 0.07 to 0.59. This suggests that nVent Electric PLC's ability to cover its short-term liabilities with its most liquid assets has not been as consistent.

The cash ratio, which is the most conservative liquidity ratio, has also displayed fluctuations, ranging from 0.08 to 0.61. This ratio indicates the company's ability to pay off its current liabilities using only its cash and cash equivalents.

Overall, while the current ratio shows an improving trend in nVent Electric PLC's liquidity position, the quick ratio and cash ratio reveal more variability in the company's ability to cover its short-term obligations with its most liquid assets. It is essential for the company to maintain a balance between its current assets and liabilities to ensure continued financial stability and operational efficiency.

Additional liquidity measure

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 Sep 30, 2019
Cash conversion cycle days 22.91 23.13 22.33 31.72 34.70 18.86 14.30 17.69 15.10 14.02 10.76 13.89 10.02 11.48 12.09 12.29 16.74 16.46 11.40 51.53

The cash conversion cycle of nVent Electric PLC has fluctuated over the past few quarters. The company's cash conversion cycle, a measure of how long it takes to convert resources inputs into cash flows, averaged around 20 days during most quarters.

There was a significant increase in the cash conversion cycle in the September 2019 quarter, reaching 51.53 days, which could indicate potential inefficiencies in managing working capital during that period. However, the company managed to reduce this cycle significantly in subsequent quarters, achieving a low of 10.02 days in the March 2023 quarter.

Overall, nVent Electric PLC seems to have effectively managed its cash conversion cycle in recent quarters, with occasional fluctuations possibly due to changes in working capital management practices or operational efficiency. Further analysis and understanding of the company's specific actions during these periods could provide more insights into the drivers of these fluctuations.