Southwest Gas Holdings Inc (SWX)

Based on the provided data, Southwest Gas Holdings Inc's liquidity ratios have shown some fluctuations over the reported periods.

1. 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 ranged from a low of 0.52 on December 31, 2021, to a high of 2.12 on June 30, 2023.
- Generally, a current ratio above 1 indicates the company can meet its short-term obligations. Southwest Gas Holdings Inc's current ratio mostly fluctuated around this benchmark, with some periods below and above 1.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets.
- Southwest Gas Holdings Inc's quick ratio was relatively volatile, with a low of 0.04 on December 31, 2022, and a high of 1.67 on June 30, 2024.
- A quick ratio above 1 indicates that the company can cover its short-term obligations without relying on selling inventory, which the company managed to achieve in several periods.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio as it only considers cash and cash equivalents in relation to current liabilities.
- Southwest Gas Holdings Inc's cash ratio was within a narrow range over the periods, with a low of 0.04 on December 31, 2022, and a high of 1.67 on June 30, 2024.
- A cash ratio below 1 may suggest the company needs to improve its ability to cover short-term obligations solely with cash, which Southwest Gas Holdings Inc mostly achieved throughout the reported periods.

In summary, Southwest Gas Holdings Inc's liquidity ratios have fluctuated over time, but generally, the company managed to maintain its ability to meet short-term obligations, with improvements in some periods. However, management should continue to closely monitor and manage liquidity to ensure the company's financial stability and operational needs are met.

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Additional liquidity measure

The cash conversion cycle of Southwest Gas Holdings Inc has shown fluctuations over the past several quarters. The cash conversion cycle measures the efficiency of a company's cash management in the process of generating revenue from its operations.

Analyzing the data provided, the cash conversion cycle for Southwest Gas Holdings Inc varied greatly, ranging from a low of 0 days to a high of 146.30 days. In December 2022, the company's cash conversion cycle reached its peak at 146.30 days, indicating a prolonged time taken by the company to convert its investments in raw materials into cash received from sales. This may suggest potential liquidity challenges or inefficiencies in working capital management during that period.

Conversely, there were also instances where the cash conversion cycle approached zero or were significantly lower, such as in September 2020, December 2020, and September 2024. A lower cash conversion cycle indicates that the company was able to efficiently convert its inventory and accounts receivable into cash relatively quickly during these periods.

Fluctuations in the cash conversion cycle can be influenced by various factors such as changes in sales volumes, inventory management practices, payment terms with suppliers, and collection periods from customers. It is essential for Southwest Gas Holdings Inc to closely monitor and manage its cash conversion cycle to ensure optimal efficiency in its working capital management and overall financial health.