Simpson Manufacturing Company Inc (SSD)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 3.21 | 3.63 | 3.38 | 4.08 | 3.88 |
| Quick ratio | 1.43 | 1.98 | 2.50 | 3.41 | 2.28 |
| Cash ratio | 0.65 | 1.19 | 1.73 | 2.46 | 1.43 |
Simpson Manufacturing Company Inc has demonstrated strong liquidity over the years based on its current ratio, which shows the ability to meet short-term obligations with current assets. The current ratio has generally been above 3, indicating that the company had more than enough current assets to cover its current liabilities during the period analyzed.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also reflects a healthy liquidity position for Simpson Manufacturing. The ratios have fluctuated but generally remained above 1, indicating the company's ability to meet its short-term obligations without relying heavily on inventory.
Furthermore, the cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, shows a decreasing trend. While the cash ratio decreased over the period, it remained above 1 in most years, suggesting that Simpson Manufacturing had sufficient cash on hand to cover its immediate liabilities.
Overall, based on the liquidity ratios provided, Simpson Manufacturing Company Inc appears to have maintained a solid financial position with ample liquidity to support its short-term obligations and operational needs.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 150.46 | 144.26 | 151.98 | 176.25 | 136.05 |
Simpson Manufacturing Company Inc's cash conversion cycle, a key metric in assessing a company's operational efficiency, has shown some fluctuation over the years. Looking at the data provided, we can see that the cash conversion cycle was 136.05 days in December 31, 2020, and increased to 176.25 days by December 31, 2021. There was a slight improvement in efficiency in the following year, with the cycle decreasing to 151.98 days by December 31, 2022. Subsequently, by December 31, 2023, the cycle further decreased to 144.26 days. However, by December 31, 2024, there was a slight increase to 150.46 days.
Overall, Simpson Manufacturing Company Inc's cash conversion cycle has displayed varying trends over the years, suggesting fluctuations in the company's ability to efficiently convert its investments in inventory and receivables into cash. Further analysis and comparison with industry benchmarks may provide additional insights into the company's working capital management and operational efficiency.