Oshkosh Corporation (OSK)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Dec 31, 2022 | Sep 30, 2022 | |
|---|---|---|---|---|---|
| Current ratio | 1.52 | 1.45 | 1.45 | 1.87 | 1.87 |
| Quick ratio | 0.07 | 0.04 | 0.04 | 0.33 | 0.33 |
| Cash ratio | 0.07 | 0.04 | 0.04 | 0.33 | 0.33 |
Oshkosh Corporation's liquidity ratios show the company's ability to meet its short-term obligations. The current ratio remained relatively stable at around 1.87 from September 2022 to December 2022, indicating that the company had $1.87 in current assets for every $1 in current liabilities during that period. However, the current ratio decreased to 1.45 by September 2023 and remained at this level by December 2023, suggesting a slight decline in the company's short-term liquidity position. The ratio then slightly improved to 1.52 by December 2024.
In contrast, the quick ratio and cash ratio, which provide a more stringent measure of liquidity by excluding inventory from current assets, show a different picture. Both the quick ratio and cash ratio were very low at 0.33 in September and December 2022, indicating that the company may have had difficulty meeting its short-term obligations without relying on inventory. These ratios then decreased significantly to 0.04 by September and December 2023 before slightly increasing to 0.07 by December 2024.
Overall, the declining trend in the quick ratio and cash ratio from 2022 to 2023 suggests potential liquidity challenges for Oshkosh Corporation during that period. The subsequent slight improvement in these ratios by December 2024 indicates some recovery in the company's short-term liquidity position.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Dec 31, 2022 | Sep 30, 2022 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 94.40 | 98.81 | 97.53 | 94.21 | 94.21 |
The cash conversion cycle of Oshkosh Corporation has shown some fluctuations over the years. As of September 30, 2022, and December 31, 2022, the cash conversion cycle was 94.21 days, indicating that it takes the company approximately 94 days to convert its investments in inventory and other resources back into cash.
However, by September 30, 2023, and December 31, 2023, the cash conversion cycle increased to 97.53 days and 98.81 days, respectively. This suggests that the company took longer to convert its resources into cash during these periods.
Subsequently, by December 31, 2024, the cash conversion cycle slightly decreased to 94.40 days. Overall, a longer cash conversion cycle may indicate inefficiencies in managing inventory, collecting receivables, or paying suppliers, while a shorter cycle may signify effective working capital management. Ongoing monitoring of the cash conversion cycle will be essential for Oshkosh Corporation to ensure optimal cash flow management and operational efficiency.