Wabash National Corporation (WNC)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.93 | 1.71 | 1.83 | 2.31 | 2.09 |
| Quick ratio | 1.06 | 0.91 | 0.89 | 1.43 | 1.24 |
| Cash ratio | 0.51 | 0.17 | 0.25 | 0.92 | 0.54 |
The liquidity ratios of Wabash National Corp. provide insights into the company's ability to meet its short-term obligations.
The current ratio has fluctuated over the years from 2.31 in 2020 to 1.71 in 2022, with a current ratio of 1.93 in 2023. This indicates that the company had $1.93 in current assets for every $1 in current liabilities at the end of 2023, improving from the previous year. A current ratio above 1 suggests that the company is in a good position to cover its short-term liabilities.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also shows variability over the years. The quick ratio was 1.17 in 2023, increasing from 1.00 in 2022. This implies that the company had $1.17 in liquid assets (excluding inventory) to cover each $1 of current liabilities at the end of 2023. A quick ratio above 1 indicates a favorable position for the company.
The cash ratio, the most conservative measure of liquidity, reflects the company's ability to cover its short-term liabilities using only its cash and cash equivalents. The cash ratio of 0.66 in 2023 signifies that the company had $0.66 in cash and cash equivalents for every $1 of current liabilities at the end of 2023, an improvement from the prior year.
Overall, the liquidity ratios of Wabash National Corp. suggest that the company has managed to maintain a reasonable level of liquidity over the years. The improving trend in the current ratio, quick ratio, and cash ratio in 2023 indicates enhanced liquidity position compared to the previous years, which can potentially support the company in meeting its short-term obligations.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 47.92 | 46.79 | 52.29 | 45.78 | 38.00 |
The cash conversion cycle of Wabash National Corp. has shown some fluctuations over the past five years. In 2023, the cycle was 46.21 days, slightly lower than the 46.45 days in 2022. However, this was higher than the 41.33 days in 2020 and the 36.63 days in 2019, indicating a longer time taken to convert inputs into cash. In 2021, the cycle peaked at 50.19 days, which was the highest value in the past five years. Overall, Wabash National Corp. should focus on managing its inventory, accounts receivable, and accounts payable efficiently to improve its cash conversion cycle and enhance liquidity.