TRI Pointe Homes Inc (TPH)

TRI Pointe Homes Inc has demonstrated strong liquidity ratios over the years, as evidenced by its current ratio, quick ratio, and cash ratio. The current ratio, reflecting the company's ability to meet short-term obligations with its current assets, has shown a consistently healthy trend, ranging from 6.99 to 62.07 between 2020 and 2024. This indicates that the company possesses more than enough current assets to cover its current liabilities.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also exhibited a positive trajectory, ranging from 1.45 to 14.22 during the same period. This suggests that even without considering inventory, TRI Pointe Homes Inc maintains a strong ability to meet its short-term obligations.

The cash ratio, focusing solely on the company's cash and cash equivalents in relation to its current liabilities, has also shown a robust performance, mirroring the trends seen in the quick ratio figures. This metric, ranging from 1.39 to 14.22 over the years, indicates that the company holds sufficient liquid assets to cover its immediate liabilities without relying on inventory or receivables.

Overall, TRI Pointe Homes Inc's liquidity ratios reflect a well-managed financial position, with ample liquidity to support its operational needs and financial obligations in the short term.

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Additional liquidity measure

TRI Pointe Homes Inc's cash conversion cycle has shown some fluctuations over the period analyzed. Starting at 419.45 days in December 31, 2020, it decreased to 372.89 days by December 31, 2021, indicating an improvement in the firm's ability to convert its investments in inventory and accounts receivable into cash. By December 31, 2022, the cycle further reduced to 363.40 days, suggesting even more efficiency in managing the conversion of resources into cash. However, by December 31, 2023, the cycle increased to 424.36 days, showing a momentary setback in the company's cash conversion efficiency. Finally, by December 31, 2024, the cycle decreased significantly to 334.56 days, indicating a positive trend in the company's cash conversion performance over the period observed. Overall, the trend in TRI Pointe Homes Inc's cash conversion cycle reflects both improvements and fluctuations in its operational efficiency in converting investments into cash.