Regal Beloit Corporation (RRX)

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 2.26 2.45 2.45 2.62 2.55 2.58 2.52 2.92 2.99 2.89 2.76 2.81 2.49 2.39 2.22 2.21 2.25 2.11 2.90 3.16
Quick ratio 0.32 0.38 0.42 0.37 0.43 0.41 0.48 0.81 0.69 0.69 0.63 0.59 0.61 0.43 0.66 0.65 0.74 0.59 0.75 1.04
Cash ratio 0.32 0.38 0.42 0.37 0.43 0.41 0.48 0.81 0.69 0.69 0.63 0.59 0.61 0.43 0.66 0.65 0.74 0.59 0.75 1.04

The current ratio of Regal Beloit Corporation has shown a declining trend from 3.16 on March 31, 2020, to 2.26 on December 31, 2024. This ratio remained above 2 throughout the period, indicating that the company had sufficient current assets to cover its current liabilities.

The quick ratio of the company also exhibited a decreasing pattern over the years, dropping from 1.04 on March 31, 2020, to 0.32 on December 31, 2024. This ratio measures the company's ability to cover immediate liabilities with its most liquid assets, excluding inventory. Although the ratio decreased, it stayed above 1 for most of the period, suggesting a reasonable level of liquidity.

The cash ratio, which is a more stringent measure of liquidity, followed a similar trajectory as the quick ratio, declining from 1.04 on March 31, 2020, to 0.32 on December 31, 2024. This ratio focuses solely on the company's ability to cover its short-term liabilities with cash and cash equivalents. The decreasing trend indicates a potential decrease in the company's immediate liquidity position.

Overall, while the liquidity ratios of Regal Beloit Corporation have declined over the years, they generally remained above industry benchmarks, indicating that the company maintained a healthy level of liquidity to meet its short-term obligations.

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 116.54 122.73 115.89 110.63 111.17 119.58 151.93 180.80 137.53 138.33 152.96 160.91 148.25 122.44 120.08 123.40 120.08 118.88 117.41 104.49

The cash conversion cycle of Regal Beloit Corporation, a measure of how efficiently the company manages its working capital, has shown fluctuations over the periods under review.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 104.49 days to a peak of 180.80 days. A longer cash conversion cycle indicates that the company takes more time to convert its investments in inventory and other resources into cash from sales. This can be a risk factor for the company as it ties up funds in operations for a longer period, potentially affecting liquidity and overall financial health.

The trend shows that there was an increase in the cash conversion cycle from March 31, 2020, to March 31, 2023, with the cycle reaching its highest point during this period. However, there was a notable decrease in the cycle by December 31, 2023, and further improvement by December 31, 2024. This reduction in the cycle duration suggests that the company may have implemented more effective working capital management strategies, enabling it to convert its assets into cash more quickly.

Overall, monitoring the cash conversion cycle of Regal Beloit Corporation is crucial for assessing the company's operational efficiency and liquidity management. The company should strive to maintain a balanced cash conversion cycle to ensure optimal use of its resources and financial stability.