Otter Tail Corporation (OTTR)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 2.03 2.17 2.27 2.92 1.84 1.80 1.74 1.73 1.91 1.90 1.64 1.08 0.95 0.66 0.63 0.56 0.54 0.92 1.15 1.46
Quick ratio 1.43 1.57 1.57 2.09 1.28 1.26 1.18 1.10 1.14 1.13 1.02 0.61 0.47 0.37 0.36 0.31 0.27 0.54 0.62 0.73
Cash ratio 0.95 0.94 0.86 1.14 0.77 0.63 0.53 0.42 0.52 0.32 0.23 0.02 0.02 0.01 0.01 0.01 0.01 0.13 0.15 0.03

The liquidity ratios of Otter Tail Corporation display a fluctuating trend over the reported periods.

The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, shows a gradual increase from March 2020 to December 2022, indicating improving liquidity. However, there is a slight dip in the ratios in the second half of 2023 and early 2024, although they remain above 1, which is considered healthy.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, follows a similar pattern to the current ratio, showing an upward trend over most of the period. This indicates that the company has a healthy level of liquid assets to cover its short-term obligations.

The cash ratio, which is the strictest measure of liquidity and only includes cash and cash equivalents, also shows a consistent improvement from March 2020 to December 2024. This signifies that Otter Tail Corporation has been gradually increasing its cash reserves in relation to its current liabilities.

Overall, while there are fluctuations in the liquidity ratios of Otter Tail Corporation, the general trend suggests that the company has been maintaining a satisfactory level of liquidity and improving its ability to meet short-term obligations over the reported periods.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days 65.97 93.08 75.03 91.22 81.90 84.66 83.33 82.39 64.16 63.25 67.04 79.51 66.41 31.89 -19.98 -1,244.47 -1,966.97 -7,273.12 -2,832.74 -23.97

The cash conversion cycle of Otter Tail Corporation has shown significant fluctuations over the periods analyzed.

From March 31, 2020, to December 31, 2021, the company operated with negative cash conversion cycles, indicating that it was able to convert its investments in raw materials into cash quickly, potentially signaling strong efficiency in managing its working capital.

However, from March 31, 2022, onwards, the cash conversion cycle turned positive, indicating that the time taken to sell inventory, collect receivables, and pay suppliers increased. This may suggest a potential slowdown in the company's cash conversion efficiency.

Notably, from September 30, 2021, to September 30, 2022, there was a transition from negative to positive days, indicating a shift in the company's working capital management practices.

The cash conversion cycle peaked at 93.08 days on September 30, 2024, suggesting a prolonged period between investing in inventory and receiving cash from sales. This could indicate challenges in managing working capital efficiently during this period.

Overall, the trend in Otter Tail Corporation's cash conversion cycle highlights variations in its working capital management efficiency, with periods of effective cash conversion followed by intervals of potential challenges in converting investments into cash.