nVent Electric PLC (NVT)

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 1.73 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
Quick ratio 0.16 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
Cash ratio 0.16 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

nVent Electric PLC's liquidity ratios demonstrate the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has fluctuated over the years, ranging from a low of 1.43 to a high of 2.29. However, it seems to have stabilized around 1.75 to 2.18 in the most recent periods, indicating that the company has a comfortable level of current assets to cover its current liabilities.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also varied significantly, with values as low as 0.08 and as high as 0.61. The ratio appears to have improved in the most recent periods, settling between 0.31 and 0.42, suggesting that the company has a better ability to meet its short-term obligations without relying on selling inventory.

The cash ratio, which focuses solely on the most liquid assets like cash and cash equivalents to cover current liabilities, mirrors the trend of the quick ratio and also shows improvement in the most recent periods. Values for the cash ratio range from 0.08 to 0.61, with the most recent figures showing a range of 0.31 to 0.42, indicating that the company has a stronger ability to pay off immediate obligations with its cash resources.

Overall, based on the trend in the current, quick, and cash ratios, nVent Electric PLC's liquidity position has improved in the most recent periods, suggesting a more robust ability to meet short-term financial obligations.

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 67.28 66.52 79.60 80.37 83.83 91.03 95.65 74.22 69.83 76.62 79.61 78.11 77.29 77.34 74.86 68.72 68.72 68.55 69.74 68.04

The cash conversion cycle of nVent Electric PLC has seen fluctuations over the past five years. It measures the time it takes for a company to convert its investments in inventory and accounts receivable into cash flows from sales.

From March 31, 2020, to September 30, 2020, the company's cash conversion cycle remained relatively stable between 68 to 69 days. However, there was a slight increase to around 74 days by June 30, 2021, and further to over 77 days by September 30, 2021.

The trend continued upward, reaching its peak at 95.65 days by June 30, 2023. This increase indicates that the company took longer to convert its resources into cash during this period.

Nevertheless, there was a significant improvement in the cash conversion cycle by December 31, 2024, where it decreased to 67.28 days. This reduction suggests that the company improved its efficiency in converting investments into cash flows and managing its working capital.

Overall, monitoring the cash conversion cycle is crucial for nVent Electric PLC to assess its operational efficiency, manage its working capital effectively, and optimize its cash flow management.