Sturm Ruger & Company Inc (RGR)
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 | 4.25 | 4.50 | 4.84 | 5.17 | 4.29 | 4.48 | 4.48 | 4.29 | 2.22 | 5.83 | 6.13 | 5.08 | 4.26 | 3.84 | 3.67 | 3.45 | 2.87 | 3.16 | 3.86 | 4.23 |
| Quick ratio | 2.84 | 2.84 | 3.11 | 3.62 | 2.81 | 2.94 | 3.18 | 2.11 | 1.78 | 3.57 | 3.83 | 3.20 | 3.61 | 2.40 | 2.23 | 2.00 | 1.73 | 1.98 | 2.97 | 3.00 |
| Cash ratio | 1.73 | 1.75 | 2.03 | 2.30 | 1.86 | 1.96 | 2.30 | 2.11 | 1.38 | 3.57 | 3.83 | 3.20 | 2.87 | 2.40 | 2.23 | 2.00 | 1.73 | 1.98 | 2.97 | 3.00 |
Sturm Ruger & Company Inc's liquidity ratios have shown some fluctuations over the years. The current ratio, which indicates the company's ability to meet its short-term obligations with its current assets, has generally been above 3, indicating a healthy liquidity position. However, there was a significant increase in the current ratio from December 2022 to June 2023 and then a sharp decline by December 2023, followed by an improvement in the subsequent quarters.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also displayed a similar trend, remaining above 2 in most periods. The quick ratio surpassed 3 in some quarters, indicating a strong ability to meet short-term obligations without relying on inventory.
The cash ratio, which provides the most conservative measure of liquidity by only considering cash and cash equivalents, generally indicated a healthy liquidity position for the company. However, there were instances of a decline in the cash ratio from December 2022 to December 2024, suggesting a reduction in the company's ability to cover its current liabilities solely with cash.
Overall, Sturm Ruger & Company Inc has maintained a relatively strong liquidity position based on the current ratio, quick ratio, and cash ratio. However, management should closely monitor the fluctuations in these ratios to ensure the company can meet its short-term obligations effectively.
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 | 100.62 | 110.38 | 105.79 | 106.72 | 101.33 | 107.53 | 92.85 | 54.07 | 85.49 | 54.66 | 49.24 | 38.24 | 54.09 | 31.61 | 26.98 | 26.13 | 15.74 | 14.05 | 13.21 | 21.05 |
The cash conversion cycle is a measure of how efficiently a company manages its working capital. It represents the time it takes for a company to convert its investments in raw materials and production into cash flows from sales. For Sturm Ruger & Company Inc, the cash conversion cycle has fluctuated over the periods provided in the data.
The cash conversion cycle for Sturm Ruger & Company Inc ranged from 13.21 days to 110.38 days over the period from March 31, 2020, to December 31, 2024. A lower cash conversion cycle indicates that the company is able to quickly sell its inventory, collect receivables, and pay its payables, thereby managing its working capital efficiently.
In the earlier periods, the company had a relatively shorter cash conversion cycle, indicating efficient management of working capital. However, in the later periods, the cash conversion cycle increased significantly, reaching a peak of 110.38 days on September 30, 2024. This suggests that the company may be facing challenges in converting its investments into cash flows from sales within a reasonable time frame.
A longer cash conversion cycle can tie up funds in working capital, impacting the company's liquidity and potentially hindering its ability to invest in growth opportunities or meet financial obligations promptly. It is essential for Sturm Ruger & Company Inc to closely monitor its cash conversion cycle and work towards improving efficiency in managing its working capital to ensure sustainable financial performance.