Newell Brands Inc (NWL)

Liquidity ratios

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 Jun 30, 2019 Mar 31, 2019
Current ratio 1.16 1.24 1.25 1.23 1.32 1.25 1.03 1.39 1.31 1.24 1.23 1.30 1.28 1.51 1.47 1.33 1.38 1.48 2.25 2.12
Quick ratio 0.53 0.53 0.52 0.45 0.50 0.52 0.41 0.55 0.59 0.59 0.62 0.66 0.74 0.86 0.78 0.64 0.74 0.63 0.77 0.56
Cash ratio 0.12 0.13 0.10 0.08 0.10 0.15 0.07 0.11 0.14 0.13 0.17 0.20 0.27 0.28 0.21 0.16 0.12 0.13 0.20 0.11

The liquidity ratios of Newell Brands Inc over the past eight quarters indicate varying levels of 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 generally been above 1, indicating that Newell Brands Inc has had sufficient current assets to meet its current liabilities. However, there has been a slight downward trend in the current ratio from Q1 2022 to Q4 2023, which may suggest a potential strain on the company's liquidity.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Newell Brands Inc's quick ratio has been consistently below 1, indicating a reliance on inventory to meet its short-term obligations. The decreasing trend in the quick ratio over the quarters raises some concerns about the company's ability to quickly convert its assets into cash if needed.

The cash ratio, the most conservative liquidity ratio, measures the company's ability to cover its current liabilities with its cash and cash equivalents alone. Newell Brands Inc's cash ratio has fluctuated over the quarters but has generally been below 0.3, indicating a relatively low level of cash reserves compared to its current liabilities.

Overall, while the company's current ratio suggests a reasonable level of liquidity, the declining trend in both the quick ratio and the cash ratio may indicate potential liquidity challenges for Newell Brands Inc in meeting its short-term obligations, particularly if the trend continues.

Additional liquidity measure

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 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 78.90 86.38 98.85 103.14 98.72 101.74 88.55 75.11 68.94 75.39 79.39 75.01 70.65 78.28 81.27 75.28 91.32 95.00 92.50 87.35

The cash conversion cycle of Newell Brands Inc has shown some variability over the past eight quarters. In Q1 2022, the company had a relatively efficient cash conversion cycle of 80.46 days, indicating that it was able to convert its investments in inventory and accounts receivable into cash relatively quickly. However, this efficiency decreased in subsequent quarters, reaching a peak of 116.60 days in Q1 2023.

In Q4 2023, the cash conversion cycle improved to 86.97 days compared to the previous quarter, showing signs of better management of working capital. Despite this improvement, Newell Brands Inc still has room to optimize its cash conversion cycle further to enhance its cash flow and liquidity position.

It is essential for the company to focus on efficiently managing its inventory levels, collecting receivables promptly, and optimizing its payment terms with suppliers to shorten its cash conversion cycle. By reducing the time it takes to convert investments in inventory and receivables into cash, Newell Brands Inc can improve its working capital efficiency and strengthen its overall financial performance.