Owens Corning Inc (OC)

Owens Corning Inc's liquidity ratios indicate the company's ability to meet its short-term obligations.

1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its current assets. Owens Corning Inc's current ratio has been relatively stable over the years, with values ranging from 1.47 to 1.82. A ratio above 1.0 indicates that the company has more current assets than current liabilities, which suggests a healthy liquidity position.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Owens Corning Inc's quick ratio fluctuates more than the current ratio, ranging from 0.70 to 1.12. A quick ratio above 1.0 implies that the company can meet its short-term liabilities without relying on the sale of inventory.

3. Cash Ratio: The cash ratio focuses solely on the most liquid assets, cash and cash equivalents, relative to current liabilities. Owens Corning Inc's cash ratio has varied from 0.16 to 0.69. A higher cash ratio indicates a stronger ability to cover short-term obligations using the most liquid assets.

Overall, Owens Corning Inc's liquidity ratios show a generally stable and healthy liquidity position over the years, with the current and quick ratios consistently above 1.0. However, a decreasing trend in ratios like the quick and cash ratios, especially towards 2024, may warrant further monitoring to ensure the company's ability to meet short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle of Owens Corning Inc has shown fluctuations over the past five years. Starting at 47.29 days in December 31, 2020, it decreased to 40.02 days by December 31, 2021, indicating an improvement in the company's efficiency in managing its cash flow. In the following year, the cash conversion cycle further decreased to 35.93 days by December 31, 2022, which suggests the company was able to convert its investments to cash more quickly.

However, by December 31, 2023, the cash conversion cycle increased slightly to 36.62 days, signaling a slight slowdown in the company's cash conversion efficiency. This trend continued in the most recent year, with the cash conversion cycle rising to 48.18 days by December 31, 2024.

Overall, while there have been fluctuations in Owens Corning Inc's cash conversion cycle, the company has shown periods of improvement in efficiently converting its investments into cash, although there have been recent signs of a slowdown in this aspect. Monitoring the cash conversion cycle closely can help assess the company's liquidity management and operational efficiency.