Tetra Tech Inc (TTEK)
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 | 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 | 1.40 | 1.73 | 1.60 |
| Quick ratio | 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 | 1.17 | 1.31 | 1.23 |
| Cash ratio | 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 | 0.16 | 0.17 | 0.21 |
The current ratio for Tetra Tech, Inc. has fluctuated over the past eight quarters, ranging from a low of 1.12 to a high of 1.42. Generally, a current ratio above 1 indicates good liquidity, as it suggests that the company has more current assets than current liabilities to cover its short-term obligations.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also mirrors the trend of the current ratio over the same period. This indicates that Tetra Tech maintains a comfortable level of liquid assets to cover its short-term liabilities without relying on inventory.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has shown a decreasing trend over the past two years. This suggests that Tetra Tech may have less readily available cash to cover its immediate obligations. However, it is important to note that the cash ratio is typically lower compared to current and quick ratios due to its narrow definition of liquidity.
Overall, Tetra Tech appears to have maintained stable liquidity levels over the past eight quarters, as indicated by its current and quick ratios. However, the decreasing trend in the cash ratio may warrant further investigation into the company's cash management practices to ensure it can meet its short-term financial obligations.
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 | 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 | 63.98 | 64.23 | 59.69 |
The cash conversion cycle of Tetra Tech, Inc. has shown fluctuations over the past eight quarters. It ranged from 72.00 days in Q2 2022 to 93.96 days in Q2 2023. The trend generally indicates a longer time it takes for Tetra Tech to convert its investments in inventory and other resources into cash received from sales.
In Q2 2022, the company had its most efficient cash conversion cycle of 72.00 days, suggesting strong management of inventory and receivables to generate cash quickly. However, in Q2 2023, the cycle extended to 93.96 days, indicating a slower conversion process, possibly due to increased inventory levels or slower collections on sales.
The cash conversion cycle improved in Q3 and Q4 2023 but saw a slight rise again in Q1 2024 to 78.21 days. Overall, Tetra Tech should focus on managing its inventory levels, accelerating its accounts receivable collection, and optimizing its accounts payable to shorten the cash conversion cycle and improve its cash flow efficiency.