Zurn Elkay Water Solutions Corporation (ZWS)

The current ratio of Zurn Elkay Water Solutions Corporation has been relatively stable over the past few years, ranging between 1.98 and 3.31, indicating the company's ability to meet its short-term obligations with its current assets. However, there was a slight dip in the current ratio in the most recent period, dropping to 2.91.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, fluctuated between 1.11 and 1.95 during the same period. This ratio also saw a decrease in the last reported period to 1.69, signifying a potential decrease in the company's ability to cover immediate liabilities without relying on inventory sales.

The cash ratio, which assesses the firm's ability to cover its short-term liabilities with cash and cash equivalents, displayed more variability, ranging from 0.22 to 1.26. However, the ratio improved in the latest period to 0.80, indicating that the company had a higher level of cash available to cover its immediate obligations.

Overall, while the current ratio suggests a healthy liquidity position, the dip in both the current and quick ratios in the most recent period may warrant further monitoring to ensure the company's ability to maintain its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle of Zurn Elkay Water Solutions Corporation has shown some fluctuations over the past few years. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From September 30, 2019, to December 31, 2019, there was a slight improvement in the cash conversion cycle, decreasing from 105.61 days to 100.11 days. This indicated a more efficient management of inventory and receivables during that period.

The trend continued to improve through March 31, 2020, with the cash conversion cycle further decreasing to 96.77 days. However, from June 30, 2020, to September 30, 2020, there was a sudden increase in the cash conversion cycle to 112.80 days, suggesting potential challenges in managing cash flows during that quarter.

The company managed to bring down the cash conversion cycle to 95.05 days by September 30, 2021, showcasing improved efficiency in managing cash conversion over time. The cycle continued to decline through December 31, 2021, reaching a low of 54.42 days, indicating a significant improvement in cash conversion efficiency for the company.

However, from March 31, 2022, to September 30, 2022, there was a notable increase in the cash conversion cycle, reaching 188.61 days. This spike may signal issues with inventory management or delays in collecting receivables during that period.

The company made progress in reducing the cash conversion cycle by December 31, 2022, but there was still room for improvement, with the cycle standing at 145.36 days. From that point onwards, there was a gradual decrease in the cash conversion cycle, indicating that the company was working on enhancing its operational efficiency.

Overall, the trend in the cash conversion cycle of Zurn Elkay Water Solutions Corporation shows some variability, with periods of improvement and occasional spikes. Analyzing these fluctuations can provide insights into the company's efficiency in managing its working capital and cash flows.