Quanta Services Inc (PWR)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.47 | 1.63 | 1.50 | 1.68 | 1.69 |
| Quick ratio | 1.09 | 1.20 | 1.15 | 1.36 | 1.29 |
| Cash ratio | 0.25 | 0.13 | 0.07 | 0.09 | 0.07 |
Quanta Services, Inc.'s liquidity ratios have shown some fluctuation over the past five years. The current ratio, which indicates the company's ability to cover its short-term obligations with its current assets, has been gradually decreasing from 1.69 in 2019 to 1.47 in 2023. This downward trend suggests that Quanta Services may be experiencing challenges in maintaining its short-term liquidity position.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also follows a similar declining pattern, decreasing from 1.67 in 2019 to 1.44 in 2023. This indicates that the company may have more difficulty meeting its immediate obligations without relying on inventory.
The cash ratio, which specifically measures a company's ability to cover its current liabilities with its cash and cash equivalents, has fluctuated over the years. While it increased from 0.38 in 2020 to 0.59 in 2023, it has generally been lower than both the current and quick ratios. This suggests that Quanta Services may have a lower level of cash reserves relative to its current liabilities.
Overall, the trend in Quanta Services, Inc.'s liquidity ratios points to a potential weakening of the company's short-term liquidity position. It is essential for the company to closely monitor its liquidity levels and take appropriate measures to ensure it can meet its financial obligations in a timely manner.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 43.64 | 52.13 | 61.60 | 63.09 | 59.74 |
The cash conversion cycle of Quanta Services, Inc. has shown improvement over the past five years. The company's cash conversion cycle decreased from 57.01 days in 2019 to 39.43 days in 2023. This indicates that Quanta Services has been able to manage its operating cycle more efficiently in recent years.
A lower cash conversion cycle suggests that the company is taking less time to convert its investment in inventory into cash received from customers. This can be a positive sign of effective working capital management and operational efficiency.
Overall, the trend of decreasing cash conversion cycle for Quanta Services, Inc. reflects an improvement in the company's ability to manage its working capital and generate cash flows from its operations more swiftly.