Southwest Gas Holdings Inc (SWX)
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 | 1.12 | 1.90 | 2.12 | 1.40 | 1.08 | 1.30 | 0.70 | 0.78 | 0.52 | 1.03 | 0.79 | 0.97 | 0.96 | 0.87 | 0.94 | 0.69 | 0.80 | 0.98 | 1.04 | 0.85 |
| Quick ratio | 0.59 | 2.15 | 2.30 | 1.39 | 0.29 | 1.74 | 0.98 | 1.03 | 0.30 | 1.64 | 1.14 | 1.37 | 0.68 | 1.63 | 1.63 | 1.30 | 0.51 | 1.61 | 0.82 | 1.29 |
| Cash ratio | 0.06 | 1.29 | 1.41 | 0.83 | 0.04 | 1.13 | 0.65 | 0.74 | 0.07 | 1.10 | 0.71 | 0.90 | 0.09 | 1.01 | 1.10 | 0.86 | 0.05 | 1.02 | 0.23 | 0.84 |
The liquidity analysis of Southwest Gas Holdings Inc based on the provided data reveals fluctuations in the company's ability to meet its short-term obligations effectively.
- Current Ratio: The current ratio measures the company's ability to pay off its short-term liabilities with its current assets. Southwest Gas Holdings Inc's current ratio has varied over the quarters, ranging from a low of 1.08 in Q4 2022 to a high of 2.12 in Q2 2023. A current ratio above 1 indicates that the company has more current assets than current liabilities, with higher values indicating better liquidity.
- Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of liquidity compared to the current ratio by excluding inventory from current assets. Southwest Gas Holdings Inc's quick ratio has shown a similar trend to the current ratio, with values ranging from 0.58 in Q4 2022 to 2.09 in Q2 2023. A quick ratio above 1 is generally considered healthy, as it suggests that the company can meet its short-term obligations without relying on selling inventory.
- Cash Ratio: The cash ratio is the most conservative liquidity measure, focusing solely on the company's ability to cover its current liabilities with cash and cash equivalents. Southwest Gas Holdings Inc's cash ratio has also fluctuated, with values ranging from 0.29 in Q4 2022 to 1.16 in Q2 2023. A cash ratio above 1 indicates that the company holds sufficient cash to cover its short-term liabilities.
Overall, while fluctuations in the liquidity ratios of Southwest Gas Holdings Inc have been observed, the company has generally maintained ratios above 1 in most quarters, indicating a satisfactory level of liquidity to meet its short-term obligations. Investors and analysts should continue to monitor these ratios to assess the company's liquidity position over time.
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 | 29.12 | 111.67 | 123.61 | 141.55 | 244.41 | 24.50 | 33.83 | 42.58 | 62.36 | 78.21 | 66.08 | 62.46 | 19.60 | 37.46 | 31.68 | 26.36 | 22.56 | 28.91 | 25.68 | 21.34 |
The cash conversion cycle of Southwest Gas Holdings Inc has been fluctuating over the past eight quarters, indicating varying efficiency in managing its cash flows. In Q4 2023, the company had a negative cash conversion cycle of -35.11 days, suggesting that it takes less time to convert its investments in inventory into cash receipts from sales and then into cash payments for expenses. This improvement from the -45.82 days in Q1 2023 may signify enhanced inventory management or quicker collection of receivables during this period.
However, it is essential to note that the company's performance in managing its cash conversion cycle has been inconsistent, with significant negative cycles seen in Q4 2022 (-231.56 days) and Q3 2022 (-99.14 days). Such prolonged negative cycles may indicate inefficiencies in managing working capital components and could lead to potential liquidity challenges.
Overall, Southwest Gas Holdings Inc's cash conversion cycle analysis suggests that while the company has shown improvements in recent quarters, it still needs to focus on maintaining a more stable and efficient cash conversion process to ensure better cash flow management in the long term.