Xpel Inc (XPEL)
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 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 4.02 | 2.97 | 3.55 | 4.35 | 3.90 | 3.29 | 2.66 | 2.21 | 2.18 | 1.89 | 2.01 | 2.78 | 2.96 | 2.77 | 2.61 | 2.93 | 3.08 | 2.59 | 2.20 |
| Quick ratio | 1.00 | 0.74 | 1.08 | 1.07 | 0.83 | 0.89 | 0.72 | 0.55 | 0.65 | 0.66 | 0.85 | 1.74 | 1.84 | 1.73 | 1.73 | 1.49 | 1.59 | 1.14 | 0.97 |
| Cash ratio | 0.32 | 0.22 | 0.40 | 0.30 | 0.29 | 0.32 | 0.23 | 0.22 | 0.27 | 0.22 | 0.35 | 1.36 | 1.37 | 1.30 | 1.35 | 1.00 | 0.98 | 0.57 | 0.41 |
The liquidity ratios of XPEL Inc demonstrate a consistent trend of improving liquidity position over the quarters. The current ratio, which measures the company's ability to cover its short-term obligations with current assets, has shown a positive trend, increasing from 2.21 in Q1 2022 to 4.35 in Q1 2023. This indicates that XPEL Inc has significantly strengthened its ability to meet its short-term financial commitments.
Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also displays an improving trend, rising from 0.63 in Q1 2022 to 1.29 in Q1 2023. This suggests that the company has a solid ability to meet its short-term obligations without relying on selling inventory.
The cash ratio, which provides the most conservative measure of liquidity by considering only cash and cash equivalents to cover current liabilities, has also shown improvement over the quarters. The ratio has increased from 0.30 in Q1 2022 to 0.52 in Q1 2023, indicating that XPEL Inc has enhanced its ability to settle its immediate liabilities with cash on hand.
Overall, the liquidity ratios of XPEL Inc reflect a positive liquidity position, with increasing current, quick, and cash ratios over the quarters. This indicates that the company has a strong ability to meet its short-term financial obligations and is managing its liquidity effectively.
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 112.72 | 96.88 | 99.38 | 114.76 | 101.64 | 84.75 | 88.70 | 77.92 | 63.51 | 46.14 | 37.58 | 40.60 | 47.99 | 41.88 | 29.06 | 50.43 |
The cash conversion cycle of XPEL Inc has exhibited some fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle was 151.25 days, which increased compared to the previous quarter's 126.92 days. This indicates that, on average, it took XPEL Inc 151.25 days to convert its investments in inventory and other resources into cash flows from sales during the fourth quarter of 2023.
Looking at the trend over the past year, we observe a general increase in the cash conversion cycle from Q1 2022 to Q4 2023. This could suggest inefficiencies in managing the company's working capital, potentially resulting in longer time periods between spending cash on inputs to sales realization and cash collection.
The highest recorded cash conversion cycle was in Q1 2023 at 146.37 days, while the lowest was in Q1 2022 at 97.42 days. This variability may indicate fluctuations in inventory management, accounts receivable collection, or accounts payable payment practices within the company.
Overall, a longer cash conversion cycle implies that XPEL Inc is taking more time to convert its investments into sales and cash inflows. This analysis suggests potential areas for improvement in working capital management to enhance operational efficiency and cash flow generation within the company.