Steel Dynamics Inc (STLD)
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 | 2.53 | 2.39 | 2.35 | 2.87 | 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 |
| Quick ratio | 0.34 | 0.62 | 0.47 | 0.74 | 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 |
| Cash ratio | 0.34 | 0.62 | 0.47 | 0.74 | 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 |
The current ratio of Steel Dynamics Inc has shown a decreasing trend from March 2023 to December 2024, with a peak of 4.20 in June 2023 and lowest point at 2.35 in June 2024. However, overall, the company has maintained a healthy current ratio above 2.0, indicating a strong ability to meet its short-term obligations with its current assets.
The quick ratio, which excludes inventory from current assets, also displays a downward trend from its peak of 1.27 in March 2023 to 0.34 in December 2024. This suggests that the company's ability to cover its short-term liabilities using its most liquid assets has decreased over the covered periods.
The cash ratio, equivalent to the quick ratio using only cash and cash equivalents, mirrors the trend of the quick ratio, demonstrating a decline in the ability to cover short-term obligations solely with cash resources. The cash ratio ranged from 0.34 in December 2024 to 1.41 in March 2020.
Overall, while the current ratio indicates Steel Dynamics Inc's robust short-term liquidity position, the downward trend in the quick and cash ratios highlights a decreasing ability to meet immediate obligations using the most liquid assets over the analyzed periods.
See also:
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 | 77.04 | 74.92 | 76.15 | 75.47 | 71.59 | 71.17 | 71.05 | 67.37 | 70.77 | 77.74 | 87.85 | 91.11 | 98.79 | 90.65 | 88.75 | 92.49 | 82.39 | 72.86 | 69.83 | 68.76 |
The cash conversion cycle of Steel Dynamics Inc has been fluctuating over the past few years based on the provided data. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales.
From March 31, 2020, to December 31, 2020, the cash conversion cycle increased steadily from 68.76 days to 82.39 days, showing a lengthening period between when the company pays for raw materials and when it receives cash from selling the finished goods.
There was a significant spike in the cash conversion cycle from March 31, 2021, where it reached its peak at 98.79 days. This increase could indicate challenges in managing inventory levels or difficulties in collecting payments from customers.
However, from September 30, 2021, to December 31, 2024, there has been a decreasing trend in the cash conversion cycle, suggesting improvements in inventory management and/or more efficient sales collection processes. The cycle decreased to 77.04 days by December 31, 2024.
Overall, while Steel Dynamics Inc experienced some challenges with its cash conversion cycle in the past, it has shown signs of improvement more recently. It is essential for the company to continue monitoring and managing its cash conversion cycle effectively to optimize its working capital and operational efficiency.