Rockwell Automation Inc (ROK)
Liquidity ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.08 | 1.46 | 1.01 | 1.02 | 1.48 |
| Quick ratio | 0.63 | 0.96 | 0.63 | 0.70 | 1.08 |
| Cash ratio | 0.13 | 0.32 | 0.14 | 0.22 | 0.39 |
Rockwell Automation Inc's liquidity ratios have shown fluctuations over the past five years. The current ratio, a measure of the company's ability to cover its short-term obligations with its current assets, has been relatively stable but has seen a decline from 1.48 in 2020 to 1.08 in 2024. This indicates that the company may have a slightly reduced ability to meet its current liabilities with its current assets.
The quick ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets, has also decreased from 1.08 in 2020 to 0.63 in 2024. This suggests that Rockwell Automation Inc may not be as well-equipped to meet its short-term obligations without relying on inventory.
The cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has shown a declining trend from 0.39 in 2020 to 0.13 in 2024. This indicates a reduced capacity to settle immediate obligations solely with available cash.
Overall, the declining trend in liquidity ratios, particularly the quick and cash ratios, suggests that Rockwell Automation Inc may be facing challenges in maintaining its short-term liquidity position. It is important for the company to closely monitor and manage its liquidity levels to ensure financial stability and meet its obligations effectively.
Additional liquidity measure
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 101.12 | 98.11 | 85.98 | 69.30 | 66.14 |
The cash conversion cycle for Rockwell Automation Inc has shown a consistent upward trend over the past five years, increasing from 66.14 days in 2020 to 101.12 days in 2024. This indicates that the company is taking longer to convert its investments in inventory and accounts receivable into cash.
A longer cash conversion cycle can potentially signify inefficiencies in managing working capital, impacting the company's liquidity and profitability. It may suggest issues such as slow inventory turnover or delayed collections on accounts receivable.
Rockwell Automation Inc should evaluate its inventory management practices and accounts receivable collection processes to optimize its cash conversion cycle and improve its overall financial performance.