Xpel Inc (XPEL)

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 4.05 4.35 4.77 4.81 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
Quick ratio 0.53 0.57 0.48 0.27 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
Cash ratio 0.53 0.57 0.48 0.27 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

Xpel Inc's liquidity ratios, as indicated by the current ratio, quick ratio, and cash ratio, have shown fluctuations over the period from March 31, 2020, to December 31, 2024.

The current ratio, which measures the company's ability to pay its short-term obligations with its short-term assets, has generally remained above 1, indicating that Xpel Inc has more current assets than current liabilities to cover its short-term obligations. The current ratio ranged from a low of 1.89 on September 30, 2021, to a high of 4.81 on March 31, 2024, with an increasing trend observed towards the end of the period.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has shown more variability compared to the current ratio. This ratio ranged from a low of 0.22 on September 30, 2021, to a high of 0.57 on September 30, 2024. The quick ratio dropping below 1 at times suggests that the company may have difficulty meeting its immediate obligations without relying on inventory.

The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, demonstrates Xpel Inc's ability to cover its short-term obligations using its most liquid assets. The cash ratio fluctuated between 0.22 on September 30, 2021, and 1.37 on December 31, 2020. This ratio shows a similar pattern to the quick ratio, indicating that the company may have had periods of tighter liquidity.

Overall, while the current ratio remained relatively healthy throughout the period, the quick ratio and cash ratio indicated some variability in Xpel Inc's ability to meet its short-term obligations using its most liquid assets. Investors and stakeholders should closely monitor these ratios for any signs of liquidity stress.

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 166.56 152.08 148.40 170.23 166.22 155.73 144.07 152.69 149.68 130.22 146.62 153.47 113.79 93.88 67.17 75.52 77.82 69.70 58.01 77.99

The cash conversion cycle of Xpel Inc has shown fluctuations over the years, indicating changes in the company's efficiency in managing its cash flow. In March 2020, the cash conversion cycle was 77.99 days, which decreased to 58.01 days by June 2020, suggesting an improvement in the company's ability to convert its investments in inventory back to cash.

However, the cycle increased to 113.79 days by December 2021, demonstrating a prolonged conversion process. This extended cycle persisted into the following years, reaching 166.56 days by December 2024.

The increasing trend in the cash conversion cycle may indicate challenges in managing working capital efficiently, potentially resulting in cash flow constraints or increased carrying costs related to inventory or receivables. Xpel Inc may need to review its inventory management, credit policies, and collection procedures to optimize its cash conversion cycle and improve overall liquidity and financial performance.