Snap-On Inc (SNA)
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 | 3.88 | 3.67 | 3.67 | 3.48 | 3.47 | 3.29 | 3.28 | 3.16 | 3.11 | 3.04 | 2.58 | 2.47 | 2.65 | 2.63 | 3.34 | 2.50 | 2.51 | 2.37 | 2.48 | 2.42 |
| Quick ratio | 2.66 | 2.50 | 2.45 | 0.80 | 2.26 | 0.74 | 0.80 | 0.81 | 2.15 | 0.72 | 0.77 | 0.71 | 2.19 | 1.84 | 2.24 | 1.55 | 1.95 | 1.40 | 1.48 | 1.45 |
| Cash ratio | 1.06 | 0.98 | 0.91 | 0.83 | 0.78 | 0.76 | 0.82 | 0.84 | 0.79 | 0.75 | 0.79 | 0.73 | 1.09 | 0.71 | 0.83 | 0.20 | 0.55 | 0.17 | 0.18 | 0.17 |
Snap-On Inc's liquidity ratios have generally shown a strong trend over the past few quarters. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has consistently been above 3. This indicates that the company has more than enough current assets to cover its current liabilities.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also demonstrated a positive trend, although there was a significant drop in the ratio in March 2023. Despite this fluctuation, the quick ratio has generally remained above 1, suggesting that Snap-On Inc has an adequate level of liquid assets to meet its short-term obligations without relying on inventory.
The cash ratio, which indicates the firm's ability to pay off its current liabilities using only cash and cash equivalents, has generally shown a stable and healthy level above 1. This implies that Snap-On Inc holds sufficient cash to cover its immediate liabilities if needed.
Overall, these liquidity ratios suggest that Snap-On Inc has maintained a solid liquidity position, with a comfortable ability to meet its short-term financial obligations across the periods analyzed.
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 | 540.09 | 534.46 | 548.14 | 436.04 | 5,295.24 | 4,678.05 | 3,866.88 | 3,459.57 | 2,905.64 | 2,507.04 | 2,287.56 | 2,216.01 | 2,143.34 | 2,115.30 | 2,030.56 | 1,806.77 | 1,971.63 | 1,421.17 | 1,304.32 | 375.80 |
The cash conversion cycle of Snap-On Inc has shown significant fluctuations over the past few years. It measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
In recent periods, the cash conversion cycle has ranged from 436.04 days to 548.14 days, indicating a prolonged period for Snap-On Inc to convert its resources into cash. The latest figure at 540.09 days suggests that there has been a slight increase in the time it takes for the company to complete this cycle.
It is worth noting that in the past, the company faced a significant increase in the cash conversion cycle, reaching an extremely high level of 5,295.24 days at the end of 2022, indicating inefficiencies in managing its working capital. The subsequent downward trend in the cycle indicates an improvement in this aspect.
Overall, Snap-On Inc should focus on optimizing its inventory management, accounts receivable collection, and accounts payable processes to reduce the cash conversion cycle and improve its liquidity position.