TRI Pointe Homes Inc (TPH)

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 19.75 17.34 21.01 22.24 21.17 3.19 3.48 5.61 12.36 9.34 9.11 10.49 14.25 12.56 15.60 21.87 15.76 0.41 0.60 0.91
Quick ratio 19.75 17.34 21.01 22.24 24.26 5.05 5.17 7.28 14.50 9.34 9.11 10.49 14.25 12.56 15.60 21.87 15.76 0.41 0.60 0.91
Cash ratio 19.75 17.34 21.01 22.24 24.26 5.05 5.17 7.28 14.50 9.34 9.11 10.49 14.25 12.56 15.60 21.87 15.76 0.41 0.60 0.91

Tri Pointe Homes Inc.'s liquidity position, as reflected in its liquidity ratios, has shown significant improvement over the quarters. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has been consistently strong and above the ideal threshold of 1. A current ratio above 2 indicates that Tri Pointe Homes Inc. has a comfortable cushion of current assets to meet its current obligations.

Similarly, the quick ratio, also known as the acid-test ratio, has remained robust and in line with the current ratio. This ratio excludes inventory from current assets, providing a more conservative measure of liquidity. Tri Pointe Homes Inc.'s quick ratio has consistently exceeded 2, indicating the company's ability to meet short-term obligations even without relying on inventory.

The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, has also been strong for Tri Pointe Homes Inc. Although slightly lower than the current and quick ratios, the cash ratio has remained above 1 in all quarters, indicating that the company has sufficient liquid resources to cover its immediate liabilities.

Overall, Tri Pointe Homes Inc.'s liquidity ratios demonstrate a healthy liquidity position, with a strong ability to meet short-term obligations. Maintaining these levels of liquidity will enable the company to navigate any potential financial challenges and seize opportunities for growth.

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 8,686.21 5,150.53 3,482.63 2,840.89 2,923.50 3,134.79 3,042.29 2,862.82 2,655.88 1,056.17 689.84 514.88 419.89 417.57 432.15 462.11 452.47 492.14 472.70 466.43

The cash conversion cycle of Tri Pointe Homes Inc. has exhibited fluctuations over the past eight quarters. In Q1 2022, the company had a negative cash conversion cycle of -0.77 days, indicating efficient management of cash flow where it was able to generate revenue from sales before needing to pay suppliers and operational expenses. However, the company's cash conversion cycle turned positive in subsequent quarters, reaching a peak of 13.77 days in Q4 2023.

The overall trend suggests that Tri Pointe Homes Inc. has experienced challenges in efficiently managing its cash flow in recent quarters, leading to a longer cash conversion cycle. This could be due to factors such as slower collection of receivables, longer payment periods to suppliers, or higher inventory holding periods.

It is important for the company to focus on improving its cash conversion cycle to ensure optimal liquidity management and operational efficiency. Implementing strategies to accelerate cash inflows, streamline accounts payable processes, and optimize inventory turnover could help Tri Pointe Homes Inc. enhance its cash conversion cycle and strengthen its financial performance.