Parker-Hannifin Corporation (PH)

Liquidity ratios

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 Dec 31, 2019 Sep 30, 2019
Current ratio 0.93 0.87 0.90 0.89 0.88 1.25 1.28 1.30 2.06 1.52 1.50 1.72 1.81 1.66 1.50 1.46 1.60 1.49 1.38 1.96
Quick ratio 0.09 0.08 0.08 0.08 0.09 0.13 0.17 0.14 0.13 0.13 0.12 0.21 0.30 0.23 0.23 0.27 0.28 0.86 0.79 1.46
Cash ratio 0.06 0.05 0.05 0.06 0.06 0.10 0.14 0.09 0.10 0.09 0.09 0.16 0.25 0.17 0.19 0.23 0.24 0.22 0.27 0.94

The liquidity ratios of Parker-Hannifin Corporation indicate its ability to meet short-term obligations and manage its current liabilities effectively.

The current ratio has been fluctuating over the past few quarters, ranging from 0.87 to 2.06, with a recent value of 0.93 as of June 30, 2024. While a current ratio above 1 typically signifies a company's ability to cover its short-term liabilities with its current assets, Parker-Hannifin's current ratio has been below 1 in recent quarters, indicating potential liquidity concerns.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has shown a similar trend. The quick ratio has fluctuated from 0.08 to 0.86, with the most recent value being 0.09 as of June 30, 2024. This suggests that the company may have difficulty meeting its immediate obligations without relying on inventory or other less liquid assets.

Furthermore, the cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, has also shown variability, ranging from 0.05 to 0.94. As of June 30, 2024, the cash ratio stood at 0.06, indicating a relatively low level of cash reserves compared to its current liabilities.

Overall, the liquidity ratios of Parker-Hannifin Corporation suggest that the company may face challenges in meeting its short-term financial obligations. It may need to closely monitor and manage its liquidity position to ensure financial stability and avoid potential liquidity crises in the future.

See also:

Parker-Hannifin Corporation Liquidity Ratios (Quarterly Data)

Additional liquidity measure

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 Dec 31, 2019 Sep 30, 2019
Cash conversion cycle days 21.66 26.18 28.35 24.94 22.69 27.40 32.61 34.98 17.53 21.07 23.96 22.53 16.98 15.14 20.37 19.73 29.42 79.50 76.63 70.92

The cash conversion cycle of Parker-Hannifin Corporation has fluctuated over the past few quarters, indicating changes in the company's efficiency in managing its working capital.

In the most recent quarter, ending on June 30, 2024, the cash conversion cycle stood at 21.66 days, showing an improvement compared to the prior quarter. This suggests that the company was able to convert its investments in inventory back into cash more efficiently during this period.

Looking back at historical data, we observe that the cash conversion cycle reached its peak at 79.50 days in the third quarter of fiscal 2019, reflecting a significant delay in the company's conversion of inventory into sales and eventually into cash. However, since then, there has been a decreasing trend in the cash conversion cycle, indicating a positive shift towards a more streamlined working capital management approach.

Overall, the trend suggests that Parker-Hannifin Corporation has been making improvements in its cash conversion cycle, which is a positive sign as it indicates better efficiency in managing its cash flow, inventory, and receivables. Keeping this trend of improvement will be vital for the company to sustain its financial health and support its growth strategies in the future.