Pentair PLC (PNR)
Liquidity ratios
| 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 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.65 | 1.50 | 1.48 | 1.76 | 1.47 | 1.42 | 1.38 | 1.52 | 1.24 | 1.23 | 1.19 | 1.47 | 1.26 | 1.18 | 1.33 | 1.96 | 1.42 | 1.44 | 1.47 | 1.77 |
| Quick ratio | 0.17 | 0.13 | 0.12 | 0.11 | 0.09 | 0.10 | 0.12 | 0.09 | 0.08 | 0.16 | 0.09 | 0.11 | 0.10 | 0.09 | 0.11 | 0.24 | 0.10 | 0.14 | 0.09 | 0.09 |
| Cash ratio | 0.18 | 0.14 | 0.13 | 0.12 | 0.10 | 0.11 | 0.13 | 0.10 | 0.09 | 0.17 | 0.10 | 0.12 | 0.11 | 0.10 | 0.12 | 0.25 | 0.11 | 0.16 | 0.11 | 0.11 |
Pentair plc's liquidity ratios indicate its ability to meet short-term obligations and cover immediate liabilities. The current ratio has shown fluctuations over the quarters but has generally been above 1, suggesting that the company has more current assets than current liabilities. This indicates a healthy liquidity position for Pentair plc.
The quick ratio, which excludes inventory from current assets, reflects a more conservative measure of liquidity. While this ratio has also varied, it has generally been below 1, indicating that Pentair plc may have difficulty covering its short-term obligations without relying on inventory.
The cash ratio, which provides the most stringent measure of liquidity by focusing solely on cash and cash equivalents, has shown slight improvements over the quarters, indicating the company's ability to cover its current liabilities with cash on hand.
Overall, the liquidity ratios of Pentair plc demonstrate a mixed but generally stable liquidity position, with the current ratio providing the most favorable assessment of the company's ability to meet its short-term obligations. However, the lower quick ratio suggests potential challenges in covering immediate liabilities without relying on inventory, and the cash ratio highlights the importance of cash reserves in maintaining liquidity.
Additional liquidity measure
| 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 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 52.44 | 53.24 | 51.71 | 54.64 | 52.29 | 51.34 | 41.76 | 34.88 | 24.90 | 24.17 | 23.15 | 21.87 | 30.25 | 23.67 | 27.48 | 23.72 | 10.02 | 26.34 | 25.85 | 30.20 |
The cash conversion cycle of Pentair plc has shown fluctuations over the past eight quarters. In Q4 2023, the company had a cash conversion cycle of 112.55 days, which was slightly higher compared to the previous quarter at 109.55 days. This indicates that Pentair plc took longer to convert its investments in inventory and other resources into cash during the fourth quarter of 2023.
The trend over the past year shows that the cash conversion cycle has been relatively stable, with some variations quarter over quarter. However, in Q1 2023, there was a significant increase in the cash conversion cycle to 128.03 days, suggesting potential challenges in managing working capital efficiently during that period.
On the positive side, the company was able to improve its cash conversion cycle in Q2 2022, where it reached a low of 92.80 days. This indicates that Pentair plc was more effective in managing its inventory and receivables, resulting in a shorter cash conversion cycle during that quarter.
Overall, Pentair plc should continue to monitor and manage its cash conversion cycle effectively to ensure optimal working capital management and liquidity in the future.