Regal Beloit Corporation (RRX)

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 2.55 2.58 2.52 2.92 2.99 2.89 2.76 2.81 2.56 2.39 2.22 2.21 2.25 2.11 2.90 3.16 2.87 2.83 2.79 2.71
Quick ratio 1.13 1.12 1.21 1.54 1.48 1.46 1.39 1.38 1.33 0.43 0.66 0.65 1.27 1.16 1.49 1.84 1.41 1.33 1.30 1.20
Cash ratio 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 0.59 0.50 0.45 0.39

Regal Rexnord Corp's liquidity ratios, as indicated by the current ratio, quick ratio, and cash ratio, have shown some fluctuations over the past eight quarters.

The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has ranged from 2.52 to 2.99 during this period. The ratios have generally been above 2, indicating that the company has had a healthy level of current assets to cover its current liabilities. However, there has been some variability in the current ratio, which could suggest changes in the company's working capital management.

The quick ratio, which provides a more conservative measure by excluding inventory from current assets, has ranged from 1.29 to 1.69. While the quick ratio has been lower than the current ratio, it still indicates a reasonable level of liquidity and the ability to meet short-term obligations without relying heavily on inventory liquidation.

The cash ratio, which is the most stringent measure of liquidity, has ranged from 0.59 to 0.96. The lower values of the cash ratio indicate that the company may have had relatively less cash compared to its current liabilities in some quarters. However, the cash ratio has generally been above 0.5, suggesting that the company has maintained a sufficient level of cash reserves to cover immediate obligations.

In summary, while Regal Rexnord Corp's liquidity ratios have shown some fluctuations, the overall trend indicates that the company has maintained a reasonably strong liquidity position over the past eight quarters. However, management should continue to monitor and manage working capital effectively to ensure the company's ability to meet its short-term obligations.

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 87.82 100.23 129.06 164.04 133.30 128.46 137.14 146.65 144.75 42.10 44.07 49.40 97.39 93.01 85.71 76.59 79.57 81.84 79.54 80.73

The cash conversion cycle of Regal Rexnord Corp has shown some fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 117.05 days, indicating that it takes approximately 117 days for the company to convert its investments in raw materials and other resources into cash received from customers. This was an improvement compared to the previous quarter (Q3 2023) when the cycle was 122.57 days.

However, looking at a longer trend, the cash conversion cycle has been somewhat volatile, reaching its peak in Q1 2023 at 184.20 days. This suggests that the company faced challenges in efficiently managing its working capital during that period.

On average, the company's cash conversion cycle over these eight quarters was 142.49 days. A lower cash conversion cycle indicates that the company is able to efficiently manage its inventory, accounts receivable, and accounts payable, resulting in quicker cash generation from its operating cycle.

It is important for Regal Rexnord Corp to continue monitoring and managing its cash conversion cycle effectively to ensure optimal liquidity and operational efficiency. Any further improvements in the cash conversion cycle could lead to enhanced working capital management and overall financial performance.