Tetra Tech Inc (TTEK)
Liquidity ratios
| 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.25 | 1.21 | 1.24 | 1.25 | 1.12 | 1.17 | 1.25 | 1.42 | 1.26 | 1.21 | 1.26 | 1.31 | 1.26 | 1.36 | 1.34 | 1.37 | 1.26 | 1.31 | 1.36 | 1.47 |
| Quick ratio | 1.07 | 1.02 | 1.05 | 1.07 | 0.95 | 0.97 | 0.20 | 0.19 | 1.03 | 0.23 | 0.23 | 0.24 | 1.00 | 1.14 | 1.12 | 1.14 | 1.05 | 1.08 | 1.11 | 1.20 |
| Cash ratio | 0.19 | 0.17 | 0.18 | 0.17 | 0.14 | 0.15 | 0.20 | 0.19 | 0.20 | 0.23 | 0.23 | 0.24 | 0.20 | 0.30 | 0.29 | 0.23 | 0.21 | 0.20 | 0.18 | 0.16 |
Tetra Tech Inc's liquidity ratios provide insights into its ability to meet short-term financial obligations. The current ratio has remained relatively stable around 1.2 to 1.3 in recent quarters, indicating the company has adequate current assets to cover its current liabilities. However, there was a noticeable decrease in the current ratio in the third quarter of 2023, suggesting a temporary strain on liquidity.
The quick ratio, which excludes inventory from current assets, shows a similar trend to the current ratio but tends to be slightly lower. This suggests that Tetra Tech may have a lower ability to meet its short-term obligations without relying on selling inventory.
The cash ratio indicates the company's ability to cover its current liabilities with its most liquid assets, cash and cash equivalents. Tetra Tech's cash ratio has fluctuated but generally remained above 0.15, indicating the company has a reasonable level of cash reserves to cover immediate liabilities.
Overall, Tetra Tech Inc's liquidity ratios suggest that the company has maintained a relatively stable liquidity position, with the current and quick ratios remaining within an acceptable range. However, management should continue to monitor liquidity metrics closely to ensure the company can meet its short-term obligations effectively.
Additional liquidity measure
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -204.48 | -846.29 | -935.93 | 6.28 | 43.89 | 49.00 | -49.15 | -71.47 | -1,286.25 | -1,287.80 | -1,280.97 | -1,499.67 | -1,281.86 | -1,131.49 | -1,091.57 | -1,176.10 | -983.95 | 22.26 | 47.90 | 60.91 |
The cash conversion cycle is an important indicator of a company's efficiency in managing its working capital. Tetra Tech Inc's cash conversion cycle has shown significant variability over the past few quarters, ranging from negative days to extremely high negative days.
In the most recent quarter, as of September 30, 2024, Tetra Tech Inc had a negative cash conversion cycle of -204.48 days. This indicates that the company is able to convert its inventory into cash and collect its receivables faster than it pays its payables. This may suggest effective inventory management and speedy collection of receivables, which could be beneficial for the company's liquidity.
On the other hand, in the prior quarter, as of June 30, 2024, the cash conversion cycle was -846.29 days, indicating a substantial improvement in efficiency compared to the previous quarter. However, this improvement may be due to significant fluctuations in inventory levels, accounts receivable, or accounts payable during that period.
Furthermore, looking at historical data, Tetra Tech Inc has experienced periods of negative cash conversion cycles in some quarters, which may suggest sound working capital management practices. However, the company has also reported notably high negative cash conversion cycles in other quarters, such as in the previous year where the cycle was -1,499.67 days as of December 31, 2021, and -1,286.25 days as of September 30, 2022. These high negative numbers may indicate delays in collecting receivables or managing payables, which could impact the company's cash flow and liquidity.
Overall, Tetra Tech Inc's cash conversion cycle has displayed significant fluctuations, with both positive and negative cycles observed. It is important for the company to maintain effective working capital management practices to ensure a healthy cash conversion cycle and optimize its cash flow position.