Cactus Inc (WHD)

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 4.33 3.82 3.75 3.24 3.17 2.78 2.76 2.83 5.61 4.74 5.23 5.33 5.60 5.59 6.44 7.98 8.69 8.58 7.09 5.35
Quick ratio 1.92 1.59 1.38 1.02 0.76 0.36 0.35 0.40 2.95 2.43 2.74 2.91 3.26 3.43 4.20 5.30 5.90 5.71 4.61 2.83
Cash ratio 1.92 1.59 1.38 1.02 0.76 0.36 0.35 0.40 2.95 2.43 2.74 2.91 3.26 3.43 4.20 5.30 5.90 5.71 4.61 2.83

Cactus Inc's liquidity ratios show a fluctuating trend over the period under consideration.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, was relatively high at over 8 in late 2020 but has since declined to around 4 by the end of 2024. This indicates that Cactus Inc may have had more than enough current assets to cover its short-term liabilities in the past, but this may have become less certain in recent periods.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. This ratio followed a similar pattern as the current ratio, starting from a high of over 5 in late 2020 and dropping to around 1.9 by the end of 2024. The decreasing trend in the quick ratio suggests that Cactus Inc's ability to meet its short-term obligations without relying on inventory has weakened over time.

The cash ratio, which is the most conservative liquidity ratio as it considers only cash and cash equivalents to current liabilities, also shows a significant decrease over the period. Starting at above 5 in late 2020, the cash ratio fell to below 2 by the end of 2024. This indicates that Cactus Inc's capacity to cover its immediate liabilities solely with cash has diminished over time.

Overall, the declining trend in these liquidity ratios suggests a potential weakening in Cactus Inc's short-term financial health and highlights the importance of closely monitoring the company's liquidity position in the future.


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 118.02 114.26 116.71 121.04 126.93 138.08 143.68 171.89 132.02 141.22 140.99 140.12 137.90 133.51 138.52 154.23 134.76 115.14 97.53 92.64

The cash conversion cycle of Cactus Inc has shown some fluctuations over the past few years. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From the data provided, we can observe that the cash conversion cycle for Cactus Inc has ranged from a low of 92.64 days as of March 31, 2020, to a high of 171.89 days as of March 31, 2023. The cycle has shown some volatility, with periods of increase followed by periods of decrease.

A longer cash conversion cycle generally indicates that the company takes more time to sell its inventory and collect cash from customers, tying up its cash flow in the process. Conversely, a shorter cycle implies that the company is able to quickly convert its resources into cash, leading to more efficient operations.

It is crucial for Cactus Inc to monitor and manage its cash conversion cycle effectively to ensure the optimal utilization of its resources and maintain a healthy cash flow position. Analyzing the trends in the cycle can help the company identify areas for improvement in inventory management, accounts receivable collection, and accounts payable turnover. A stable and efficient cash conversion cycle is essential for the overall financial health and liquidity of the company.