Triumph Group Inc (TGI)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.64 | 2.66 | 2.85 | 2.49 | 2.35 | 2.22 | 2.25 | 1.63 | 1.60 | 1.65 | 1.76 | 1.79 | 2.16 | 2.09 | 2.17 | 1.49 | 1.58 | 1.24 | 1.24 | 1.21 |
| Quick ratio | 1.49 | 0.83 | 1.06 | 0.88 | 0.97 | 0.80 | 0.79 | 0.56 | 0.70 | 0.65 | 0.67 | 0.76 | 1.09 | 1.01 | 1.00 | 0.36 | 0.86 | 0.40 | 0.40 | 0.37 |
| Cash ratio | 1.10 | 0.47 | 0.54 | 0.42 | 0.57 | 0.31 | 0.29 | 0.25 | 0.40 | 0.37 | 0.35 | 0.42 | 0.82 | 0.75 | 0.65 | 0.04 | 0.49 | 0.06 | 0.03 | 0.03 |
Triumph Group Inc's liquidity ratios show fluctuations over the analyzed period. The current ratio, which measures the company's ability to meet short-term obligations with current assets, has shown some variability but appears to have improved recently, with a current ratio of 2.64 as of March 31, 2024. This indicates that Triumph Group Inc has $2.64 in current assets for every $1 in current liabilities, reflecting a healthy liquidity position.
On the other hand, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has displayed more volatility. It was highest at 1.49 on March 31, 2024, and lowest at 0.36 on June 30, 2020. This suggests that Triumph Group Inc's ability to meet short-term obligations with its most liquid assets has varied significantly over the period, raising potential concerns about inventory levels.
Furthermore, the cash ratio, which evaluates the company's ability to cover current liabilities with cash and cash equivalents alone, has shown a similar trend of fluctuation. Triumph Group Inc's cash ratio was highest at 1.10 on March 31, 2024, and lowest at 0.03 on multiple occasions. This indicates that Triumph Group Inc may have limited ability to cover its short-term obligations solely with cash reserves, highlighting the importance of managing cash effectively.
In conclusion, while Triumph Group Inc's current ratio has generally improved over time, demonstrating a stronger liquidity position, the quick ratio and cash ratio reveal more variability and potential vulnerability in the company's ability to meet short-term obligations with its most liquid assets. Continuous monitoring of these ratios and effective cash management practices will be essential for Triumph Group Inc to maintain a healthy liquidity position.
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 99.05 | 120.92 | 158.91 | 160.91 | 98.34 | 139.56 | 136.57 | 129.22 | 112.75 | 109.40 | 110.11 | 104.95 | 92.50 | 83.93 | 79.32 | 64.09 | 44.50 | 49.45 | 44.16 | 42.80 |
The cash conversion cycle of Triumph Group Inc has shown fluctuations over the past 20 quarters. It measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales to customers.
The company's cash conversion cycle ranged from a low of 42.80 days to a high of 160.91 days. A shorter cash conversion cycle indicates more efficient management of working capital, while a longer cycle suggests inefficiencies in managing inventory, receivables, and payables.
In the most recent quarter, ending March 31, 2024, Triumph Group Inc had a cash conversion cycle of 99.05 days, representing a decrease from the previous quarter. This improvement may indicate more effective management of inventory and quicker collection of receivables. However, the cycle is still relatively high compared to historical performance.
It is important for Triumph Group Inc to closely monitor and manage its cash conversion cycle to optimize operational efficiency and cash flow management. Identifying opportunities to streamline processes, reduce inventory levels, and accelerate collections from customers could help in improving the company's overall financial health.