Valvoline Inc (VVV)
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 | 0.72 | 0.73 | 0.73 | 2.24 | 2.59 | 2.68 | 3.95 | 1.84 | 1.76 | 1.64 | 1.74 | 1.85 | 1.82 | 2.00 | 2.16 | 2.40 | 3.24 | 3.19 | 3.45 | 1.89 |
| Quick ratio | 0.44 | 0.46 | 0.63 | 1.97 | 2.31 | 2.52 | 3.86 | 0.09 | 0.10 | 1.06 | 1.16 | 1.26 | 0.52 | 1.42 | 1.56 | 1.89 | 2.69 | 2.66 | 2.81 | 1.32 |
| Cash ratio | 0.19 | 0.19 | 0.51 | 1.70 | 2.09 | 2.34 | 3.76 | 0.03 | 0.03 | 0.15 | 0.20 | 0.28 | 0.40 | 0.46 | 0.56 | 1.04 | 1.71 | 1.74 | 1.93 | 0.38 |
The liquidity ratios of Valvoline Inc show some fluctuations over the periods analyzed.
- The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, declined from 3.45 in December 2019 to 0.72 in September 2024, indicating a significant decrease in short-term liquidity over the period.
- The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also experienced a notable decrease from 2.81 in March 2020 to 0.44 in September 2024, suggesting a reduced ability to meet short-term obligations without relying on inventory.
- The cash ratio, reflecting the company's ability to cover its current liabilities with cash and cash equivalents, varied widely but generally trended downwards, from 1.93 in March 2020 to 0.19 in September 2024, indicating a declining ability to pay off immediate liabilities solely with cash reserves.
Overall, the trend in Valvoline Inc's liquidity ratios shows a potential deterioration in the company's short-term financial health and the need for careful monitoring and management of liquidity in the future.
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 | -1.98 | 3.34 | 2.21 | 6.69 | -6.08 | 18.90 | -169.28 | -1.33 | 2.61 | 76.02 | 77.46 | 79.45 | 8.07 | 70.45 | 74.05 | 79.78 | 69.81 | 65.05 | 58.85 | 69.39 |
The cash conversion cycle of Valvoline Inc has varied over the past few quarters. The cycle measures the time it takes for a company to convert its investment in inventory into cash flows from sales. From Dec 31, 2019, to Dec 31, 2020, there was an upward trend in the cash conversion cycle, peaking at 79.78 days by the end of Mar 31, 2021. However, from Mar 31, 2021, to Sep 30, 2022, there was a general downward trend, indicating efficiency improvements in managing inventory, receivables, and payables.
It is noteworthy that there were some extreme fluctuations in the cash conversion cycle, such as the negative cycle of -169.28 days on Mar 31, 2023. A negative cash conversion cycle can indicate that the company is able to collect receivables much faster than paying its suppliers, resulting in a favorable position.
The most recent data available, as of Sep 30, 2024, shows a negative cash conversion cycle of -1.98 days, indicating efficient management of working capital. Overall, it is important for Valvoline Inc to closely monitor its cash conversion cycle to ensure optimal efficiency in managing its operating cycle and maximizing cash flow generation.