Reliance Steel & Aluminum Co (RS)

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 3.21 3.31 5.02 5.74 5.66 5.53 5.18 4.83 3.55 3.25 3.02 3.96 3.91 4.25 4.36 4.35 5.08 5.04 4.25 4.20
Quick ratio 0.26 0.25 0.40 1.09 1.28 1.11 0.87 0.84 0.85 0.44 0.30 0.46 0.28 0.63 0.80 0.92 1.12 0.98 0.35 0.23
Cash ratio 0.26 0.25 0.40 1.09 1.28 1.11 0.87 0.84 0.85 0.44 0.30 0.46 0.28 0.63 0.80 0.92 1.12 0.98 0.35 0.23

Reliance Steel & Aluminum Co's current ratio has shown fluctuation over the past few years, starting at a high of 5.66 as of December 31, 2023, before decreasing to 3.21 as of December 31, 2024. The company's current ratio remained above 4 for most of the period, indicating strong liquidity and ability to meet short-term obligations.

In terms of the quick ratio, Reliance Steel & Aluminum Co started at a low of 0.23 on March 31, 2020, before steadily increasing and reaching a peak of 1.28 on December 31, 2023. However, the quick ratio dropped to 0.26 by December 31, 2024. The quick ratio suggests the company's ability to meet immediate obligations with its most liquid assets, excluding inventory.

The cash ratio, which measures a company's ability to cover its current liabilities with cash and cash equivalents, closely mirrors the quick ratio for Reliance Steel & Aluminum Co. The company's cash ratio ranged from 0.23 to 1.28 over the period under review, with the highest level being on December 31, 2023. This indicates the company had a sufficient level of cash to cover its short-term obligations during that period.

Overall, the liquidity ratios of Reliance Steel & Aluminum Co demonstrate that the company maintained a strong liquidity position throughout the period, although there were some fluctuations in the quick and cash ratios towards the end of the review period, which may require further examination to understand the reasons behind the changes.


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 75.04 80.54 82.48 77.83 72.25 73.89 73.84 63.36 61.86 65.97 73.59 67.83 78.49 82.70 85.02 87.96 85.88 82.97 81.05 80.98

The cash conversion cycle of Reliance Steel & Aluminum Co has shown fluctuations over the periods indicated in the data. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally more favorable as it signifies quicker turnover of resources into cash.

From March 31, 2020, to December 31, 2024, the cash conversion cycle for Reliance Steel & Aluminum Co ranged from a high of 87.96 days to a low of 61.86 days. It increased gradually until March 31, 2022, before experiencing a notable decrease by December 31, 2022. This decrease indicates an improvement in efficiency in managing inventory, collecting receivables, and managing payables.

The company's cash conversion cycle continued to show variability in the subsequent periods, suggesting ongoing fluctuations in its operational efficiency. It is important for management to monitor and maintain an optimal balance in the cash conversion cycle to ensure effective working capital management and sustainable financial performance.