Quanex Building Products (NX)

Liquidity ratios

Jan 31, 2024 Oct 31, 2023 Jul 31, 2023 Apr 30, 2023 Jan 31, 2023 Oct 31, 2022 Jul 31, 2022 Apr 30, 2022 Jan 31, 2022 Oct 31, 2021 Jul 31, 2021 Apr 30, 2021 Jan 31, 2021 Oct 31, 2020 Jul 31, 2020 Apr 30, 2020 Jan 31, 2020 Oct 31, 2019 Jul 31, 2019 Apr 30, 2019
Current ratio 2.27 2.03 2.12 2.22 2.22 2.01 1.93 2.04 1.98 1.58 1.72 1.73 1.86 1.59 1.85 2.93 1.91 1.73 2.15 2.32
Quick ratio 1.12 1.88 1.25 1.16 1.06 1.77 1.00 1.07 1.00 1.62 1.00 1.07 1.12 1.75 1.17 1.86 0.96 1.79 1.07 1.20
Cash ratio 0.40 0.43 0.54 0.37 0.36 0.39 0.32 0.27 0.24 0.25 0.31 0.36 0.39 0.40 0.38 1.02 0.26 0.28 0.12 0.24

Based on the provided data, Quanex Building Products has demonstrated varying levels of liquidity over the past few quarters.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 2 in recent quarters. This indicates that the company has more than enough current assets to cover its current liabilities, providing a cushion against potential short-term financial difficulties.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also shown some fluctuations. Despite some variations, the quick ratio has generally been above 1, implying that the company has an acceptable level of liquid assets to cover its short-term obligations without relying on inventory.

On the other hand, the cash ratio has shown more volatility, with fluctuations in the company's ability to cover its current liabilities with cash and cash equivalents alone. While the cash ratio has dipped below 1 in some quarters, indicating potential difficulty in meeting short-term obligations with just cash on hand, it has generally been at a decent level.

Overall, the liquidity ratios suggest that Quanex Building Products has maintained a strong liquidity position, with a comfortable level of current assets to cover its short-term obligations. However, the volatility in the cash ratio warrants attention to ensure the company can meet its short-term financial commitments effectively.

Additional liquidity measure

Jan 31, 2024 Oct 31, 2023 Jul 31, 2023 Apr 30, 2023 Jan 31, 2023 Oct 31, 2022 Jul 31, 2022 Apr 30, 2022 Jan 31, 2022 Oct 31, 2021 Jul 31, 2021 Apr 30, 2021 Jan 31, 2021 Oct 31, 2020 Jul 31, 2020 Apr 30, 2020 Jan 31, 2020 Oct 31, 2019 Jul 31, 2019 Apr 30, 2019
Cash conversion cycle days 45.95 71.63 45.00 49.43 50.25 73.80 54.00 53.79 50.35 76.08 41.22 35.05 41.32 66.73 39.80 46.14 41.44 69.53 50.26 52.38

The cash conversion cycle of Quanex Building Products has shown fluctuations over the period analyzed. The cash conversion cycle indicates the time it takes for a company to convert its investment in inventory into cash flows from sales to customers.

From the data provided, the company's cash conversion cycle has ranged from a low of 35.05 days to a high of 76.08 days. A shorter cash conversion cycle typically suggests efficient processes in managing inventory, collecting receivables, and paying obligations.

The trend indicates that Quanex Building Products has experienced variations in its working capital efficiency over time. A decreasing trend, such as the decrease from 76.08 days to 35.05 days from Oct 31, 2022, to Apr 30, 2021, suggests improvements in managing its operating cycle. Conversely, an increasing trend, as seen from 35.05 days to 76.08 days from Apr 30, 2021, to Oct 31, 2021, may indicate challenges in managing working capital effectively.

The company should continue to monitor and manage its cash conversion cycle to ensure optimal working capital management, efficient operations, and sustained profitability. A lower cash conversion cycle can lead to better liquidity, reduced financial risk, and enhanced overall financial performance.