Xylem Inc (XYL)

Liquidity ratios

Dec 31, 2024 Sep 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 Dec 31, 2019
Current ratio 1.75 1.96 1.67 1.76 1.72 1.64 2.01 1.89 1.65 1.63 1.62 2.27 2.33 1.85 1.84 1.80 2.59 2.40 1.55 1.63
Quick ratio 1.19 1.31 1.11 1.20 1.11 1.04 1.31 1.28 1.14 1.10 1.11 1.65 1.70 1.44 1.43 1.43 2.01 1.84 1.08 1.17
Cash ratio 0.48 0.48 0.41 0.46 0.33 0.31 0.56 0.59 0.61 0.57 0.58 0.97 0.96 0.94 0.92 0.96 1.25 1.15 0.47 0.48

Based on the given data for Xylem Inc's liquidity ratios, let's analyze the trends:

1. Current Ratio:
- Xylem Inc's current ratio has shown fluctuations over the years, ranging from a low of 1.55 in March 2020 to a high of 2.59 in September 2020.
- Generally, the company has maintained a current ratio above 1, indicating it has more current assets than current liabilities to meet short-term obligations.
- However, there are periods where the current ratio dropped below 2, such as in March 2022 and June 2023, which could indicate a tighter liquidity position.

2. Quick Ratio:
- Xylem Inc's quick ratio has also experienced variations, with values ranging from a low of 1.04 in June 2023 to a high of 2.01 in September 2020.
- The quick ratio is a more stringent measure of liquidity as it excludes inventory from current assets, showing the company's ability to meet short-term obligations with its most liquid assets.
- Similar to the current ratio, the quick ratio generally remains above 1, signifying Xylem Inc's ability to cover short-term liabilities.

3. Cash Ratio:
- The cash ratio, which measures the company's ability to cover short-term obligations with its cash and equivalents, has also been variable for Xylem Inc.
- Xylem Inc's cash ratio ranged from a low of 0.31 in June 2023 to a high of 1.25 in September 2020, showing fluctuations in the company's cash position over time.
- While the company's cash ratio generally stays above 0.5, indicating a healthy level of cash reserves relative to short-term liabilities, there are periods of lower ratios, like in March 2023, which may raise concerns about liquidity.

In summary, Xylem Inc has maintained liquidity levels above industry standards, as indicated by current, quick, and cash ratios generally above 1. However, fluctuations in these ratios over time suggest the need for continuous monitoring of the company's liquidity position to ensure it can meet its short-term obligations effectively.

Additional liquidity measure

Dec 31, 2024 Sep 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 Dec 31, 2019
Cash conversion cycle days 70.85 85.93 81.96 84.07 101.21 116.97 87.11 80.51 93.56 94.30 87.84 73.87 79.21 73.34 77.15 67.77 82.96 82.06 77.06 65.43

The cash conversion cycle of Xylem Inc has shown fluctuations over the years, ranging from 65.43 days to 116.97 days. A shorter cash conversion cycle indicates that the company is able to efficiently convert its resources into cash, while a longer cycle suggests delays in converting investments into cash receipts.

During the period under review, the cash conversion cycle reached its peak at 116.97 days on June 30, 2023, which could be a concern as it indicates a longer period for the company to receive cash from its investments. However, it decreased to 70.85 days by December 31, 2024, which reflects improved efficiency in managing cash flows.

Overall, the trend in Xylem Inc's cash conversion cycle indicates variability in the company's ability to manage its working capital effectively. It would be important for stakeholders to monitor and analyze the factors contributing to these fluctuations to ensure sustainable financial health and liquidity for the company.