UFP Technologies Inc (UFPT)
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 | 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 | 3.17 | 3.00 | 2.77 | 2.90 |
| Quick ratio | 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 | 1.93 | 1.98 | 1.72 | 1.70 |
| Cash ratio | 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 | 0.22 | 0.53 | 0.25 | 0.13 |
UFP Technologies Inc's liquidity ratios indicate the company's ability to meet short-term obligations. The current ratio has been consistent over the periods, averaging around 2.5, suggesting the company has more than enough current assets to cover current liabilities. The quick ratio, which excludes inventory from current assets, also shows stability around 1.3, indicating the company can meet its short-term liabilities without relying on inventory.
On the other hand, the cash ratio has varied significantly, ranging from 0.08 to 0.29. This ratio measures the company's ability to cover current liabilities with cash and cash equivalents alone, showing a lower level of cash compared to current liabilities in most periods. However, an increasing trend in the cash ratio from the start of 2022 to the end of 2023 indicates an improvement in the company's liquidity position.
Overall, UFP Technologies Inc seems to have a strong liquidity position based on the current and quick ratios, although attention may need to be given to the cash ratio to ensure there is sufficient cash to cover short-term 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 | 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 | 80.56 | 81.62 | 83.55 | 83.32 |
The cash conversion cycle for UFP Technologies Inc has shown fluctuations over the past few quarters. The average cash conversion cycle has been around 95 days with a range of approximately 80 to 120 days. A lower cash conversion cycle indicates that the company is able to convert its inventory into cash more quickly, which is generally favorable.
In the most recent quarter, the cash conversion cycle increased to 109.82 days compared to the previous quarter at 103.87 days. This suggests that the company took longer to convert its investments in inventory back into cash during the period. It will be essential for the company to closely monitor this trend to ensure efficient management of its working capital.
Looking at historical data, the cash conversion cycle fluctuated with no distinct pattern over the past few years. The company experienced its lowest cash conversion cycle of 80.56 days in March 2020 and its highest of 120.72 days in March 2022. This variability may indicate changes in the company's operational efficiency, sales practices, or inventory management strategies over time.
Overall, UFP Technologies Inc should focus on optimizing its cash conversion cycle to enhance its liquidity and operational efficiency. Constant monitoring and analysis of the components of the cycle, including accounts receivable, inventory, and accounts payable, will be crucial in improving its working capital management.