Rockwell Automation Inc (ROK)

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 1.25 1.46 1.12 1.08 1.03 1.01 1.06 1.08 1.07 1.02 1.34 1.39 1.34 1.48 1.31 1.57 1.45 1.54 1.51 1.59
Quick ratio 0.72 0.96 0.69 0.66 0.62 0.63 0.67 0.67 0.70 0.70 0.95 0.98 0.96 1.08 0.94 1.10 1.08 1.15 1.09 1.15
Cash ratio 0.13 0.32 0.11 0.12 0.13 0.14 0.15 0.15 0.19 0.22 0.37 0.30 0.33 0.39 0.41 0.36 0.45 0.55 0.47 0.48

Rockwell Automation Inc's liquidity ratios provide insights into its ability to meet short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown some fluctuation over the past few quarters, ranging from 1.25 to 1.03. This indicates that the company has generally been able to meet its short-term obligations, with a recent improvement in its liquidity position.

The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, has also displayed variability, ranging from 1.04 to 0.69. While the ratios generally indicate the company's ability to meet short-term liabilities, the downward trend in recent quarters warrants attention and suggests a potential decrease in the company's ability to cover immediate liabilities with its most liquid assets.

The cash ratio, which compares a company's most liquid assets to its current liabilities, has shown a similar fluctuation, with values ranging from 0.40 to 0.18. This indicates that Rockwell Automation Inc may have experienced some variability in its ability to cover liabilities with its cash and cash equivalents.

Overall, while the current ratio suggests an improvement in liquidity, the downward trend in both the quick ratio and cash ratio indicates the need for careful monitoring of the company's liquidity position and potential adjustments to its working capital management.

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 102.77 98.22 115.44 106.69 98.23 84.58 84.59 79.22 76.30 69.26 67.83 76.70 76.31 65.69 68.95 63.46 65.58 56.85 69.35 68.33

The cash conversion cycle (CCC) of Rockwell Automation Inc, a measure of the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has shown some variability in recent periods.

The company's CCC has fluctuated between 78.32 days and 125.70 days over the past eight quarters. Generally, a lower CCC is preferable as it indicates that the company is able to convert its resources into cash more quickly, thereby improving its liquidity and potentially reducing the need for external financing.

Looking at the trend, there is an apparent increase in the CCC in the most recent quarter compared to the same quarter in the previous year. This may suggest a longer time for the company to convert its investments into cash, potentially indicating inefficiencies in managing inventory, collecting receivables, or paying payables.

It would be beneficial for stakeholders to understand the drivers behind the changes in the CCC to assess the company's operational efficiency and working capital management. This could involve a closer examination of inventory management, accounts receivable collection, and accounts payable policies and practices.