Oshkosh Corporation (OSK)

Oshkosh Corporation's liquidity ratios have shown some fluctuations over the years.

1. Current Ratio: Oshkosh Corporation's current ratio has generally been above 1, indicating that the company has been able to meet its short-term liabilities with its current assets. However, there has been a slight decrease in the current ratio from 2.12 in June 2020 to 1.52 in December 2024. This downward trend may raise concerns about the company's ability to cover its short-term obligations in the future.

2. Quick Ratio: The quick ratio measures the company's ability to pay off its current liabilities without relying on the sale of inventory. Oshkosh Corporation's quick ratio has shown significant fluctuations, ranging from 0.02 in March 2024 to 0.64 in September 2021. The quick ratio has generally been low, indicating that the company may have difficulty meeting its short-term obligations without relying on inventory liquidation.

3. Cash Ratio: The cash ratio focuses on the company's ability to cover its current liabilities with cash and cash equivalents. Oshkosh Corporation's cash ratio has also exhibited fluctuations, with values ranging from 0.02 in March 2024 to 0.64 in September 2021. Similar to the quick ratio, the cash ratio has generally been low, suggesting that the company may have limited cash reserves to meet its short-term obligations.

In conclusion, while Oshkosh Corporation has maintained a current ratio above 1, indicating overall liquidity, the fluctuations in the quick ratio and cash ratio highlight potential challenges in meeting short-term obligations without relying on inventory or cash reserves. Investors and stakeholders may want to monitor these ratios closely to assess the company's liquidity position.

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Additional liquidity measure

The cash conversion cycle of Oshkosh Corporation has shown some fluctuation over the past few years. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory into cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is able to efficiently manage its working capital.

Analyzing Oshkosh Corporation's cash conversion cycle data from March 31, 2020, to December 31, 2024, we observe the following trends:

- The cash conversion cycle ranged from a low of 70.99 days on September 30, 2021, to a high of 103.75 days on June 30, 2020.
- The company showed improvement in its cash conversion cycle from mid-2021 to mid-2022, with a decreasing trend in the number of days required to convert investments in inventory to cash flows.
- However, the trend reversed in the latter part of 2022 and continued through 2024, with the cash conversion cycle increasing again.

Overall, Oshkosh Corporation's cash conversion cycle has displayed fluctuations during the period under review. It is important for the company to closely monitor and manage its inventory, accounts receivable, and accounts payable to optimize its cash conversion cycle and improve working capital efficiency.