Rockwell Automation Inc (ROK)
Liquidity ratios
| 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.08 | 1.04 | 1.11 | 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 |
| Quick ratio | 0.63 | 0.60 | 0.66 | 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 |
| Cash ratio | 0.13 | 0.11 | 0.13 | 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 |
Rockwell Automation Inc's liquidity ratios have shown some variability over the past few quarters.
The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has fluctuated between 1.01 and 1.46, with the latest value at 1.08 as of September 30, 2024. While the current ratio has generally remained above 1, indicating a sufficient cushion, the downward trend in recent quarters suggests a potential decrease in the company's liquidity.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also exhibited fluctuations, ranging from 0.60 to 1.10. The latest quick ratio of 0.63 indicates that Rockwell Automation may have some difficulty meeting its short-term obligations without relying on inventory.
The cash ratio, which represents the ability to cover current liabilities with cash and cash equivalents, has varied between 0.11 and 0.45. The most recent value of 0.13 implies that the company holds a relatively low proportion of cash compared to its current liabilities, which may pose liquidity challenges in meeting immediate financial obligations without relying on other current assets.
Overall, while Rockwell Automation Inc has maintained a current ratio above 1, indicating a basic level of liquidity, the downward trends in the quick ratio and cash ratio suggest potential challenges in meeting short-term obligations solely with readily available assets. Management may need to monitor liquidity closely and implement strategies to improve the company's short-term financial position.
Additional liquidity measure
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 102.14 | 103.00 | 102.97 | 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 |
The cash conversion cycle of Rockwell Automation Inc has shown some fluctuations over the past few quarters. The cash conversion cycle measures the amount of time it takes for a company to convert its investments in inventory into cash flow from sales. A longer cash conversion cycle indicates a longer time for the company to recoup its investment in inventory and may strain the company's working capital.
In the most recent quarter, as of September 30, 2024, Rockwell Automation Inc's cash conversion cycle was 102.14 days, slightly lower than the previous quarter's 103.00 days. This suggests that the company is taking approximately 102 days to convert its investments in inventory into cash flow from sales.
Looking at trend, we can see that Rockwell Automation's cash conversion cycle has experienced some fluctuation quarter on quarter. The company's cycle has ranged from a low of 63.46 days in March 2020 to a high of 115.44 days in June 2023. Overall, the trend has shown some level of stability in recent quarters, with the cycle standing around the 100-day mark.
In analyzing the cash conversion cycle, it is important for Rockwell Automation Inc to continue to monitor and potentially improve this metric. Shortening the cash conversion cycle can help free up cash flow, improve working capital efficiency, and potentially enhance overall financial performance.