Watts Water Technologies Inc (WTS)

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 2.59 2.55 2.50 2.48 2.61 2.74 2.53 2.56 2.51 2.48 2.30 2.27 2.11 2.07 2.13 2.24 2.27 2.37 2.39 2.09
Quick ratio 0.93 0.73 0.66 0.59 0.87 0.96 0.73 0.79 0.83 0.59 0.55 0.56 0.59 0.57 0.61 0.65 0.70 0.64 0.53 0.65
Cash ratio 0.93 0.73 0.66 0.59 0.87 0.96 0.73 0.79 0.83 0.59 0.55 0.56 0.59 0.57 0.61 0.65 0.70 0.64 0.53 0.65

Watts Water Technologies Inc has shown a stable current ratio over the period analyzed, ranging from 2.07 to 2.74. This indicates that the company has a strong ability to meet its short-term obligations with its current assets. It is positive to note that the current ratio has consistently remained above 2, indicating a healthy liquidity position.

The quick ratio, which measures the firm's ability to meet short-term obligations with its most liquid assets, such as cash and equivalents, shows some fluctuation. It has fluctuated between 0.53 and 0.96. While the quick ratio has generally been lower than the current ratio, indicating a reliance on inventory or other current assets to meet short-term obligations, the upward trend from 0.53 to 0.96 by December 31, 2023, suggests an improving liquidity position.

The cash ratio, which is the most conservative measure of liquidity, has also displayed a similar trend to the quick ratio. It has varied between 0.53 and 0.96, reflecting the company's ability to cover short-term liabilities with its cash and cash equivalents.

In conclusion, based on the analysis of liquidity ratios, Watts Water Technologies Inc has maintained a strong liquidity position, as evidenced by consistently healthy current ratios, albeit with some fluctuations in quick and cash ratios. The company seems capable of meeting its short-term obligations efficiently throughout the period under review.

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 120.26 128.49 132.16 135.02 133.06 129.77 141.69 133.83 124.04 140.67 144.88 137.54 129.84 128.52 118.44 112.77 108.94 113.38 117.77 111.13

The cash conversion cycle of Watts Water Technologies Inc has shown some fluctuations over the period from March 31, 2020, to December 31, 2024. 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 March 2020 to June 2021, the cash conversion cycle increased steadily from 111.13 days to 118.44 days, indicating a longer time period to convert resources into cash. This trend continued until September 2021, reaching a high of 128.52 days. However, there was a decrease in the cycle by December 2022, down to 124.04 days, before increasing again in the following periods.

Overall, the cash conversion cycle has shown some volatility, with peaks and troughs reflecting potential inefficiencies in the company's operations in managing its inventory, receivables, and payables. It is essential for Watts Water Technologies Inc to monitor and improve its cash conversion cycle to ensure efficient cash flow management and optimize its working capital utilization.