Northwest Natural Gas Co (NWN)

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
Current ratio 0.86 0.86 0.80 0.89 0.83 0.94 0.66 0.59 0.60 0.49 0.48 0.52 0.52 0.44 0.65 0.90 0.61 0.57
Quick ratio 0.35 0.43 0.43 0.57 0.53 0.46 0.30 0.25 0.28 0.10 0.17 0.29 0.29 0.16 0.41 0.76 0.31 0.21
Cash ratio 0.06 0.31 0.26 0.23 0.25 0.33 0.14 0.04 0.03 0.03 0.04 0.03 0.05 0.07 0.31 0.61 0.05 0.08

The liquidity ratios of Northwest Natural Holding Co, as indicated by the current ratio, quick ratio, and cash ratio, have shown fluctuations over the quarters in 2022 and 2023.

The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has ranged from 0.59 to 0.94. The ratio decreased from Q1 2022 to Q2 2022 before showing some improvement in subsequent quarters. However, the ratio remains below 1 for most quarters, indicating potential challenges in meeting short-term obligations.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also varies between 0.54 and 0.75. Similar to the current ratio, the quick ratio is below 1 for all quarters, highlighting the company's reliance on inventory to meet short-term obligations.

The cash ratio, which provides the most conservative measure by considering only cash and cash equivalents, has fluctuated between 0.33 and 0.62. While the company has shown some improvement in its cash position, the ratio remains relatively low, indicating a limited ability to cover immediate liabilities solely with cash on hand.

Overall, the liquidity ratios suggest that Northwest Natural Holding Co may face challenges in meeting short-term obligations, particularly if current trends persist. It may be prudent for the company to focus on improving its liquidity position to ensure financial stability and operational continuity.

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
Cash conversion cycle days 47.62 13.19 -37.38 -70.20 -54.76 -16.19 -114.25 -149.27 -45.65 -53.47 -98.54 -76.09 -18.77 -60.25 -56.09 -61.67 -52.54 -27.19

Northwest Natural Holding Co's cash conversion cycle has shown significant fluctuations over the past eight quarters. The company's performance in managing its cash conversion cycle has varied considerably, impacting its working capital management efficiency.

In Q1 2022 and Q2 2022, Northwest Natural Holding Co had negative cash conversion cycles of -50.81 days and -36.44 days respectively. This suggests that the company was able to convert its investments in inventory and accounts receivable into cash at a faster rate than it paid its creditors during these periods. Such a negative cash conversion cycle indicates effective management of working capital and efficient cash flow operations.

However, in subsequent quarters, the cash conversion cycle turned positive, indicating that the company took longer to convert its investments in inventory and accounts receivable into cash. In Q4 2023, the cash conversion cycle was 37.33 days, reflecting a significant increase from the negative cycles observed in the earlier periods.

Overall, the fluctuating trend in Northwest Natural Holding Co's cash conversion cycle raises concerns about its working capital management practices. The company should aim to stabilize and possibly reduce the length of its cash conversion cycle to improve efficiency in converting investments into cash and managing its overall working capital effectively. Further analysis and potentially strategic adjustments may be necessary to optimize working capital management and enhance cash flow performance in the future.