UFP Technologies Inc (UFPT)

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 2.56 2.57 3.13 2.87 2.48 2.48 2.59 2.43 2.08 2.27 2.35 2.54 2.25 4.86 4.40 4.68 4.75 4.27 3.86 3.42
Quick ratio 1.29 1.35 1.50 1.38 1.20 1.19 1.31 1.28 1.06 1.24 1.19 1.28 1.30 3.49 3.13 3.32 3.35 2.82 2.39 2.14
Cash ratio 0.18 0.21 0.32 0.22 0.09 0.11 0.10 0.12 0.08 0.17 0.10 0.09 0.29 1.76 1.54 1.52 1.60 1.09 0.74 0.42

The liquidity ratios of UFP Technologies Inc reflect its ability to meet short-term obligations and remain financially stable.

1. Current Ratio: The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has shown fluctuations over the periods. It ranged from a high of 4.86 on September 30, 2021, to a low of 2.08 on December 31, 2022. The decreasing trend from 2021 to 2024 may indicate potential liquidity challenges in the future.

2. Quick Ratio: The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibited variability. The company had a peak quick ratio of 3.49 on September 30, 2021, and a low of 1.06 on December 31, 2022. The declining trend post-2021 shows a potential strain on the company's ability to meet immediate obligations without relying on inventory.

3. Cash Ratio: The cash ratio, which is the most conservative liquidity ratio focusing solely on cash and cash equivalents, followed a similar pattern of fluctuations. It ranged from a high of 1.76 on September 30, 2021, to a low of 0.08 on December 31, 2022. The decreasing trend indicates a potential decrease in the company's ability to settle short-term liabilities with cash only.

Overall, while UFP Technologies Inc has generally maintained a healthy liquidity position over the periods, the decreasing trend in all three ratios from 2021 to 2024 suggests a need for the company to closely monitor its liquidity management and ensure sufficient funds are available to meet its short-term obligations.

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 102.20 127.80 108.95 107.22 109.82 103.87 102.35 96.60 94.75 110.65 115.19 120.72 113.01 89.25 87.52 91.37 85.22 87.00 84.56 80.59

The cash conversion cycle of UFP Technologies Inc has fluctuated over the periods in consideration, ranging from 80.59 days to 127.80 days. Generally, a shorter cash conversion cycle is more favorable as it signifies that the company is efficiently managing its working capital and converting its inventory, accounts receivable, and accounts payable into cash quickly.

From March 31, 2020, to June 30, 2021, the cash conversion cycle showed a relatively stable trend, with minor fluctuations. However, starting from December 31, 2021, there was a significant increase in the cash conversion cycle, reaching a peak of 127.80 days on September 30, 2024, before slightly decreasing by the end of the period on December 31, 2024.

This increase in the cash conversion cycle may indicate potential issues with inventory management, collection of receivables, or payment of payables, which could lead to cash flow challenges for the company. It is crucial for UFP Technologies Inc to closely monitor and improve its cash conversion cycle to enhance its liquidity and overall financial health.