nVent Electric PLC (NVT)

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 1.83 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
Quick ratio 0.16 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
Cash ratio 0.18 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

nVent Electric PLC's liquidity ratios show fluctuations over the periods. The current ratio, a measure of the company's ability to meet short-term obligations with its current assets, ranged from 1.43 to 2.29. The ratio has generally been above 1, indicating a healthy level of liquidity, with the highest ratio observed in September 2020.

In terms of the quick ratio, which excludes inventory from current assets to provide a more stringent measure of liquidity, nVent Electric PLC's ratios varied significantly from 0.07 to 0.59. The quick ratio has been generally lower compared to the current ratio, reflecting the impact of inventory on the company's liquidity position. Notably, the ratio was highest in September 2020 and lowest in December 2019.

The cash ratio, indicating the proportion of current liabilities that can be covered by cash alone, ranged from 0.08 to 0.61. This ratio provides insight into the company's ability to settle its short-term obligations using its most liquid assets. The highest cash ratio was observed in September 2020, suggesting a strong cash position compared to current liabilities.

Overall, while the current ratio indicates a stable liquidity position for nVent Electric PLC, the quick and cash ratios show more variability and may highlight potential fluctuations in the company's ability to quickly meet its short-term financial commitments solely relying on its most liquid assets. Further analysis and monitoring of these ratios can provide valuable insights into the company's liquidity management.

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 15.95 22.91 23.13 16.23 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

The cash conversion cycle of nVent Electric PLC has exhibited fluctuations over the past few quarters. The company's cash conversion cycle provides insights into how efficiently it manages its cash flows. A shorter cash conversion cycle reflects that nVent Electric PLC is able to convert its investments into cash quickly, indicating efficient working capital management.

Looking at the trend, we see that the cash conversion cycle has varied significantly, ranging from 10.02 days to 34.70 days, over the period analyzed. The cycle was relatively shorter in the earlier quarters, suggesting effective management of receivables, inventory, and payables. However, in more recent quarters, the cash conversion cycle has increased, indicating potential challenges in maintaining efficient cash flow operations.

It is crucial for nVent Electric PLC to closely monitor and potentially streamline its working capital management processes to minimize the cash conversion cycle. By optimizing the time it takes to convert investments into cash, the company can enhance its liquidity position and overall financial performance.