Oshkosh Corporation (OSK)

Oshkosh Corp's liquidity ratios have shown a downward trend over the past five years. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, decreased from 1.96 in 2019 to 1.45 in 2023. This indicates that the company may have faced challenges in maintaining its short-term liquidity position.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also decreased from 1.24 in 2019 to 0.76 in 2023. This suggests that Oshkosh Corp's ability to meet its short-term obligations without relying on inventory has weakened over the years.

Furthermore, the cash ratio, which indicates the company's ability to cover its current liabilities with cash and cash equivalents, dropped significantly from 0.30 in 2019 to 0.07 in 2023. This sharp decline may raise concerns about Oshkosh Corp's cash position and its capacity to meet immediate financial obligations.

Overall, the decreasing trend in Oshkosh Corp's liquidity ratios highlights potential challenges in the company's short-term financial health and raises questions about its ability to manage current liabilities effectively. It may be worth investigating the reasons behind this decline and implementing strategies to improve liquidity management in the future.

---

Additional liquidity measure

The cash conversion cycle of Oshkosh Corp has fluctuated over the past five years. As of December 31, 2023, the company's cash conversion cycle stands at 122.47 days, representing the number of days it takes for the company to convert its investments in inventory and receivables into cash. This indicates that Oshkosh Corp takes approximately 122 days to convert its resources into cash through sales.

Comparing this figure to previous years, we observe an increasing trend from 2019 to 2020, with a significant jump in the cash conversion cycle to 130.42 days. However, the company managed to reduce this metric in 2021 to 103.77 days before experiencing a slight increase in 2022 and 2023.

The cash conversion cycle is a crucial indicator of a company's efficiency in managing its working capital. A shorter cash conversion cycle indicates better efficiency in managing inventory and receivables, resulting in faster conversion into cash. Conversely, a longer cycle suggests that the company may be facing challenges in converting its resources into cash promptly.

Overall, Oshkosh Corp should continue monitoring and managing its cash conversion cycle effectively to optimize its working capital and enhance its overall financial performance.