WESCO International Inc (WCC)

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 2.36 2.40 2.39 2.18 2.21 2.12 2.11 2.08 1.98 1.82 2.05 1.84 2.20 2.36 2.67 2.34 2.33 2.30 2.18
Quick ratio 1.81 1.21 1.22 1.17 1.61 1.08 1.08 1.07 1.58 1.02 0.95 1.06 1.37 1.12 1.18 1.50 1.72 1.32 1.28 1.19
Cash ratio 0.15 0.17 0.15 0.10 0.13 0.07 0.07 0.06 0.07 0.08 0.09 0.11 0.15 0.14 0.12 0.33 0.14 0.13 0.08 0.09

Wesco International, Inc. has displayed a generally stable current ratio over the past eight quarters, averaging around 2.33. This indicates that the company has had more than double the current assets compared to its current liabilities, reflecting a healthy liquidity position. The upward trend in the current ratio over time suggests an improvement in the company's ability to meet short-term obligations.

The quick ratio of Wesco International, Inc. has also been relatively consistent, averaging approximately 1.32. This ratio considers only the most liquid assets to cover current liabilities, excluding inventory. The company's quick ratio above 1 implies that it can meet its short-term obligations without relying heavily on selling inventory, which is a positive sign of liquidity.

The cash ratio, although the lowest among the three liquidity ratios, has shown a slight increase over the quarters, averaging 0.17. This ratio measures the company's ability to cover current liabilities with its cash and cash equivalents alone. While the cash ratio is lower than the current and quick ratios, it has been gradually improving, indicating a stronger position in terms of liquidity using only cash resources.

Overall, Wesco International, Inc. appears to have maintained a strong liquidity position, as reflected by its current, quick, and cash ratios over the past eight quarters. The company's ability to meet its short-term obligations with ease suggests a solid financial health in terms of liquidity management.

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 111.48 77.14 79.30 82.38 110.07 80.91 76.26 73.55 103.21 68.98 67.29 75.20 124.93 111.37 146.26 60.84 84.72 64.17 67.57 63.52

The cash conversion cycle of Wesco International, Inc. has shown some fluctuations in recent quarters. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

In Q4 2023, the cash conversion cycle was 90.10 days, slightly longer compared to the previous quarter at 86.84 days. This indicates that the company took a longer time to convert its resources into cash during this period. The increase in the cycle could be attributed to factors such as slower sales turnover, increased inventory holding periods, or extended collection periods from customers.

Looking back at the trend over the past year, the cash conversion cycle has generally been within a range of 85 to 91 days. It peaked in Q1 2023 at 91.81 days, possibly indicating operational inefficiencies or challenges in managing working capital during that period. Conversely, the lowest cycle was observed in Q2 2022 at 82.64 days, reflecting a more efficient conversion of resources into cash during that quarter.

Overall, Wesco International, Inc. should aim to continuously monitor and improve its cash conversion cycle to ensure optimal utilization of resources and timely cash flows from sales. Strategies to streamline inventory management, enhance sales efficiency, and expedite collection processes can help in reducing the cycle and boosting the company's financial performance.