Woodward Inc (WWD)

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 2.65 2.38 2.54 2.21 2.15 2.43 2.95 3.61 4.39 4.00 4.24 4.01 3.80 3.09 2.31 2.25 1.68 1.80 2.02 1.94
Quick ratio 1.10 1.03 1.02 0.86 0.71 0.89 1.02 1.48 2.13 2.13 2.21 2.03 1.67 1.37 0.87 0.90 0.66 0.74 0.82 0.83
Cash ratio 0.25 0.22 0.19 0.19 0.16 0.20 0.23 0.56 1.29 1.22 1.06 0.84 0.61 0.38 0.18 0.17 0.18 0.14 0.10 0.10

Liquidity Ratio Analysis of Woodward Inc:

1. Current Ratio:
- Woodward Inc's current ratio has been relatively stable over the past eight quarters, ranging from 2.15 to 3.61. This indicates the company's ability to cover its short-term obligations with its current assets. A current ratio above 1 signifies a healthy financial position, and Woodward Inc consistently maintains a current ratio well above this threshold.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Woodward Inc's quick ratio has varied between 1.24 and 2.29 over the same period. This ratio reflects the company's ability to meet its short-term obligations without relying on inventory sales, which is important in assessing immediate liquidity.

3. Cash Ratio:
- The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. Woodward Inc's cash ratio has ranged from 0.29 to 0.69, indicating fluctuations in the company's ability to meet immediate obligations with cash on hand. A higher cash ratio is generally preferred as it signifies a stronger ability to meet short-term liabilities without relying on other current assets.

Overall Assessment:
- Woodward Inc appears to have maintained solid liquidity positions over the quarters analyzed, with current, quick, and cash ratios generally within acceptable ranges. The current and quick ratios suggest a healthy balance of current assets to current liabilities, ensuring the company's ability to meet its short-term financial obligations. However, the cash ratio shows some variability, indicating potential fluctuations in the company's cash position over time. Overall, Woodward Inc's liquidity ratios indicate a sound financial position in terms of meeting short-term obligations.

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 101.65 104.09 110.69 118.00 111.92 107.39 109.06 110.50 98.53 102.16 116.37 119.08 107.66 108.03 123.36 115.89 103.85 108.66 101.89 106.95

The cash conversion cycle for Woodward Inc has shown some fluctuations over the past eight quarters. From Q2 2022 to Q2 2023, there was a general increasing trend in the cash conversion cycle, reaching a peak of 160.40 days in Q2 2023. However, in Q3 2023, there was a slight decrease to 153.64 days, followed by further improvement in Q4 2023 with a cycle of 141.94 days.

In Q1 2024, the cash conversion cycle increased slightly to 141.52 days, but it remains lower compared to the levels seen in Q2 and Q1 of 2023. This indicates that Woodward Inc has been able to manage its cash conversion cycle more efficiently in recent quarters.

Overall, Woodward Inc should continue to focus on optimizing its cash conversion cycle to improve its working capital management and ensure efficient use of resources in the business operations.