Trex Company Inc (TREX)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 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
Current ratio 0.93 1.40 1.78 1.39 1.89 1.50 1.14 1.03 0.99 1.36 2.30 3.06 4.52 2.65 2.20 1.74 3.03 3.11 2.96 2.75
Quick ratio 0.26 0.61 1.11 1.02 0.58 1.13 0.89 0.72 0.46 0.53 1.41 2.22 3.30 2.05 1.61 1.35 2.22 2.48 2.34 2.11
Cash ratio 0.00 0.05 0.00 0.01 0.02 0.03 0.01 0.01 0.04 0.03 0.12 0.81 1.59 0.35 0.03 0.03 1.14 0.18 0.11 0.05

Trex Company Inc's liquidity ratios indicate its ability to meet short-term financial obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with current assets, has fluctuated over the periods analyzed. It peaked at 4.52 on December 31, 2021, which suggests a strong ability to meet current obligations but declined to 0.93 on December 31, 2024, indicating potential liquidity challenges.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also showed fluctuations. The ratio peaked at 3.30 on December 31, 2021, indicating a strong ability to cover immediate liabilities with highly liquid assets. However, it dropped to 0.26 on December 31, 2024, which may raise concerns about the company's ability to meet short-term obligations without relying on inventory.

Lastly, the cash ratio, which focuses solely on a company's ability to cover its current liabilities with cash and cash equivalents, displayed mixed results. The ratio ranged from a low of 0.00 on June 30, 2024, to a high of 1.59 on December 31, 2021. A fluctuating cash ratio may suggest varying levels of cash availability for meeting short-term obligations.

Overall, Trex Company Inc's liquidity ratios demonstrate variability in its ability to meet short-term obligations, with some periods showing stronger liquidity positions than others. Monitoring these ratios closely can provide valuable insights into the company's financial health and ability to manage liquidity risks effectively.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 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
Cash conversion cycle days 91.07 96.98 115.28 141.56 54.00 81.16 127.34 165.85 93.34 69.06 63.18 70.54 69.52 99.02 113.94 141.11 64.12 124.22 130.59 134.31

The cash conversion cycle of Trex Company Inc, a measure of how long it takes for the company to convert its investments in inventory and other resources back into cash, fluctuated over the given period but generally exhibited a decreasing trend from March 31, 2020, to December 31, 2024. The cycle started at 134.31 days in March 2020, decreased to a low of 54.00 days by December 31, 2023, before slightly increasing to 91.07 days by the end of December 31, 2024.

During the period, the company managed to improve its efficiency in managing its working capital and converting it into cash more rapidly. A decreasing cash conversion cycle typically indicates that the company was able to optimize its inventory management, accounts payable, and accounts receivable processes efficiently.

However, the slight increase in the cash conversion cycle towards the end of the period could indicate potential challenges in managing working capital or slowing down the efficiency of converting assets into cash. It is essential for Trex Company Inc to continuously monitor and analyze its cash conversion cycle to ensure sustainable and efficient cash flow management in the future.