Steel Dynamics Inc (STLD)
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 | 2.91 | 3.77 | 4.20 | 4.15 | 3.76 | 3.67 | 3.52 | 3.42 | 3.10 | 2.91 | 2.84 | 2.95 | 3.38 | 3.28 | 3.60 | 4.02 | 4.22 | 4.00 | 4.35 | 4.02 |
| Quick ratio | 1.60 | 2.16 | 2.40 | 2.44 | 2.12 | 2.02 | 1.84 | 1.72 | 1.42 | 1.45 | 1.45 | 1.57 | 1.86 | 1.86 | 2.16 | 2.38 | 2.47 | 2.19 | 2.33 | 2.10 |
| Cash ratio | 0.91 | 1.18 | 1.19 | 1.27 | 1.11 | 0.94 | 0.62 | 0.57 | 0.56 | 0.53 | 0.60 | 0.75 | 1.09 | 1.08 | 1.40 | 1.41 | 1.63 | 1.21 | 1.17 | 0.96 |
Steel Dynamics Inc. has shown a consistent trend of strong liquidity based on its current, quick, and cash ratios over the past eight quarters. The current ratio has generally been above 3, indicating that the company has more than enough current assets to cover its current liabilities. The peak was observed in Q2 2023 at 4.20, demonstrating a significant ability to meet short-term obligations.
Similarly, the quick ratio has also remained robust, with values consistently above 2. This indicates that Steel Dynamics has an ample level of liquid assets to cover its immediate liabilities without relying on selling inventory. The highest quick ratio of 2.51 was recorded in Q1 2023, showing the company's strong liquidity position at that point in time.
Moreover, the cash ratio has been relatively healthy, hovering around 1 or above, suggesting that the company can easily meet its short-term obligations using its cash on hand. Notably, the cash ratio peaked at 1.34 in Q1 2023, indicating the strongest ability to cover current liabilities solely with cash.
Overall, Steel Dynamics Inc. has maintained a solid liquidity position, with consistently high current, quick, and cash ratios throughout the quarters analyzed. This suggests that the company has the financial flexibility to meet its short-term financial obligations without facing liquidity constraints.
See also:
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 | 103.28 | 106.60 | 109.29 | 77.94 | 81.71 | 88.10 | 99.38 | 102.84 | 101.35 | 96.81 | 91.32 | 93.24 | 85.35 | 77.00 | 71.14 | 79.30 | 77.63 | 81.77 | 82.08 | 82.83 |
The cash conversion cycle of Steel Dynamics Inc. has shown fluctuations over the last eight quarters. The company's cash conversion cycle measures the time taken to convert its investments in inventory and accounts receivable into cash inflows from sales.
In Q1 2022, the cash conversion cycle was at its peak of 101.89 days, indicating a longer period for the company to convert its investments into cash. Since then, there has been a downward trend in the cash conversion cycle up to Q4 2023, where it reached a low of 75.93 days. This suggests an improvement in the company's efficiency in managing its working capital.
The fluctuations in the cash conversion cycle might be attributed to changes in inventory management, credit policies, and sales efficiency. A shorter cash conversion cycle indicates that the company is able to collect cash from customers and convert inventory into sales quicker, which is generally positive for cash flow and liquidity.
Overall, Steel Dynamics Inc. has shown improvements in its cash conversion cycle over the past quarters, indicating enhanced working capital management and potentially more efficient operations. Monitoring this metric will be crucial for assessing the company's ability to generate cash flows from its core business activities.