Standex International Corporation (SXI)

The liquidity position of Standex International Corporation over the specified periods demonstrates a generally stable and increasingly robust profile from September 2020 through September 2024, with some minor fluctuations thereafter.

Current Ratio Analysis:
The current ratio exhibits a trend of gradual improvement, rising from 2.75 at the end of September 2020 to a peak of 3.55 in September 2024. This ratio consistently remains above 2.5, indicating a strong capacity to meet short-term obligations with current assets. The steady upward trend from late 2022 onward suggests enhanced liquidity management or growth in current assets relative to current liabilities.

Quick Ratio Analysis:
The quick ratio mirrors the general positive trend observed in the current ratio, albeit at a slightly lower level, reflecting the exclusion of inventories from current assets. It elevated from 1.72 in September 2020 to reaching 2.65 in September 2024. The ratio has maintained values well above 1 throughout the period, underscoring that the company possesses sufficient liquid assets (excluding inventories) to cover immediate liabilities. Notably, there is a marked increase in the quick ratio starting around March 2023, indicating improved liquidity in terms of assets that are readily convertible to cash.

Cash Ratio Analysis:
The cash ratio, which measures the company's ability to settle current liabilities solely with cash and cash equivalents, shows a modest upward trend initially, peaking at 1.46 in June 2024, and then declining slightly thereafter. Its values typically hover below 1, fluctuating between 0.63 and 1.46 throughout the period, suggesting that while Standex maintains adequate cash reserves, it relies on other liquid assets to meet immediate obligations. The ratios reflect a conservative liquidity stance, with the company generally capable of covering short-term liabilities in cash, especially in early 2024.

Overall Summary:
Across all liquidity measures, Standex International consistently demonstrates a solid liquidity position, with ratios well above commonly accepted minimum thresholds (e.g., current ratio above 2, quick ratio above 1), indicating conservative liquidity management and a strong short-term financial health. The upward trends through 2022 and into 2024 suggest strategic improvements in liquidity buffer levels, though a slight dip in the cash ratio toward the end of the period indicates a modest reduction in immediate cash reserves relative to current liabilities. The stability and positive trajectory of these ratios portray a financially sound operating stance with sufficient liquidity to meet short-term obligations.

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Additional liquidity measure

The data on Standex International Corporation's cash conversion cycle (CCC) over the specified periods illustrates notable fluctuations, reflecting operational and financial management dynamics.

Initially, the CCC demonstrated a declining trend from approximately 95.74 days as of September 30, 2020, to a low of 74.13 days recorded on September 30, 2021. This decrease suggests improvements in the company's operational efficiency, potentially stemming from faster inventory turnover or shorter receivables and payables periods, which enhance liquidity and reduce working capital requirements.

Post-September 2021, the CCC exhibits periods of stabilization followed by gradual increases. From September 30, 2021, to December 31, 2022, it remained relatively steady, oscillating around the mid-80s to high 80s days. During this interval, the company likely maintained a balance between receivables collection, inventory management, and supplier payment terms.

Starting around March 2023, the CCC begins a noticeable upward trend. It exceeds 90 days by September 2023, reaching approximately 107.42 days by September 30, 2024. The increase becomes more pronounced in subsequent quarters, with the cycle surpassing 130 days by December 2024 and rising further to 146.25 days by March 2025. This elongation indicates a deterioration in the company's operational efficiency or a strategic shift, such as extending receivable collection periods, delaying payable settlements, or increasing inventory holdings.

Overall, the observed pattern shows an initial period of efficiency improvement, followed by a phase of waning liquidity management effectiveness, culminating in a significantly extended cash conversion cycle towards the later periods. This trend may imply increased working capital requirements, potential liquidity pressures, or strategic decisions affecting cash flow timing. Continuous monitoring would be necessary to assess the implications for the company's operational performance and cash management practices.