Quanta Services Inc (PWR)
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 | 1.30 | 1.23 | 1.30 | 1.36 | 1.47 | 1.61 | 1.68 | 1.63 | 1.63 | 1.60 | 1.56 | 1.51 | 1.50 | 2.41 | 1.75 | 1.72 | 1.68 | 1.69 | 1.74 | 1.78 |
| Quick ratio | 0.12 | 0.12 | 0.10 | 0.22 | 0.25 | 0.07 | 0.10 | 0.06 | 0.13 | 0.06 | 0.05 | 0.07 | 0.07 | 0.72 | 0.10 | 0.10 | 0.09 | 0.10 | 0.25 | 0.18 |
| Cash ratio | 0.12 | 0.12 | 0.10 | 0.22 | 0.25 | 0.07 | 0.10 | 0.06 | 0.13 | 0.06 | 0.05 | 0.07 | 0.07 | 0.72 | 0.10 | 0.10 | 0.09 | 0.10 | 0.25 | 0.18 |
Quanta Services Inc's current ratio, a measure of short-term liquidity, has exhibited fluctuations over the reported period, ranging from a high of 2.41 in September 30, 2021, to a low of 1.23 in September 30, 2024. Despite some variability, the current ratio generally remained above 1, indicating the company's ability to meet its short-term obligations.
When we consider the quick ratio, which excludes inventory from current assets, the trend shows a similar pattern of fluctuation, ranging from 0.05 in June 30, 2022, to 0.72 in September 30, 2021. This suggests that Quanta Services may have had difficulty meeting its short-term obligations in periods where the quick ratio was lower.
The cash ratio, which is the most conservative measure of liquidity focusing solely on cash and cash equivalents, also displayed fluctuation during the reported period. This ratio ranged from 0.05 in June 30, 2022, to 0.72 in September 30, 2021. The variations in the cash ratio reflect changes in the company's cash position and its ability to cover immediate obligations without relying on other current assets.
Overall, while Quanta Services Inc's liquidity ratios have shown some variability, the company generally maintained a current ratio above 1, ensuring it could meet short-term obligations. However, the fluctuations in the quick and cash ratios indicate the importance of monitoring the company's short-term liquidity position closely.
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 | 4.67 | 5.05 | 4.49 | 4.41 | 3.56 | 3.58 | 3.64 | 3.88 | 2.59 | 2.54 | 2.67 | 2.84 | 2.80 | 2.23 | 2.31 | 1.97 | 1.93 | 1.49 | 1.74 | 1.75 |
The cash conversion cycle of Quanta Services Inc has shown some fluctuations over the periods analyzed. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2024, the cash conversion cycle increased from 1.75 days to 4.67 days. This indicates a lengthening of the time it takes for Quanta Services Inc to generate cash from its operating activities.
The trend suggests that the company may be experiencing challenges in managing its working capital efficiently, which could lead to potential liquidity issues if not addressed. A longer cash conversion cycle may also indicate inefficiencies in inventory management or difficulties in collecting receivables promptly, impacting the company's overall cash flow position.
It would be crucial for Quanta Services Inc to closely monitor and address the factors contributing to the lengthening of its cash conversion cycle to ensure sustainable cash flows and financial stability in the long run.