Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
Hubbell Inc., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Current Ratio
- The current ratio exhibited relative stability from March 2018 to December 2019, fluctuating mostly between 1.86 and 2.09, indicating a consistent ability to cover short-term liabilities with current assets. Notably, a dip to 1.67 occurred in December 2020, suggesting a temporary reduction in liquidity. However, from March 2021 onward, the current ratio generally rebounded, fluctuating around the 1.75 to 2.16 range, with an increasing trend in the last few quarters through September 2023, reflecting an improvement in current asset coverage over liabilities.
- Quick Ratio
- The quick ratio followed a similar stable pattern from March 2018 through December 2019, ranging between approximately 1.04 and 1.27, reflecting a solid liquidity position excluding inventory. There was a notable decrease to 0.95 in December 2020, indicating reduced liquidity in the immediate assets category during that period. Following this, the ratio showed gradual improvement with fluctuations, moving back above 1.00 from early 2021 and reaching up to 1.35 by September 2023. This suggests an overall strengthening of liquid asset coverage relative to current liabilities over the observed periods, despite some short-term variability.
- Cash Ratio
- The cash ratio demonstrated more pronounced volatility throughout the periods. Initially, it hovered between 0.23 and 0.36 from March 2018 to December 2019, indicating a modest direct cash cover of current liabilities. During 2020, there was a significant spike to 0.56 in June, followed by a decrease to 0.28 by December 2020. Subsequent quarters exhibited fluctuations generally between 0.26 and 0.55, culminating in an increasing trend from March 2022 through September 2023, peaking at 0.55. This trend highlights periods of varying cash reserves, with a recent tendency toward stronger immediate cash liquidity.
- General Observations
- All three liquidity ratios illustrate a degree of resilience and recovery following declines around the end of 2020. The current and quick ratios recovered more steadily, suggesting ongoing adequate working capital management excluding and including less liquid current assets. The cash ratio, being a more conservative measure of liquidity, displayed more variability but generally increased towards the later quarters, indicating improved cash availability. These trends may reflect adaptive financial strategies and adjustments over time, likely in response to external economic conditions affecting the company’s liquidity position.
Current Ratio
Hubbell Inc., current ratio calculation (quarterly data)
| 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 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||||
| Current ratio1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||||||||
| Caterpillar Inc. | ||||||||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets generally exhibited a growth trend over the observed period. Starting at approximately 1,720,800 thousand US dollars in the first quarter of 2018, current assets increased steadily with occasional fluctuations, reaching a peak close to 2,318,400 thousand US dollars by the third quarter of 2023. Notable increases appeared in the later part of 2021 and during 2022, indicating an accumulation of liquid or near-liquid resources during these periods.
- Current Liabilities
- Current liabilities showed relative stability throughout the period, with less pronounced variation compared to current assets. Beginning at about 898,500 thousand US dollars in early 2018, current liabilities fluctuated modestly, mostly staying within the range of 840,000 to 1,070,000 thousand US dollars. Peaks were noticed near the end of 2020 and again in the mid-2023 quarters, but without a clear upward or downward trend over the entire span.
- Current Ratio
- The current ratio exhibited variability but remained mostly above 1.5, indicating a generally adequate short-term liquidity position. The ratio started near 1.92 in early 2018, peaked above 2.0 on multiple occasions (most notably mid-2019, late 2020, mid-2022, and into 2023), and experienced a dip to around 1.59 by the first quarter of 2021. Throughout the timeline, the ratio remained consistently above the threshold of 1.5, suggesting that the company's current assets covered its current liabilities by a comfortable margin for the majority of the periods.
- Overall Insights
- The data reveals a strengthening liquidity profile over time, as current assets increased more markedly than current liabilities. Despite some volatility in the current ratio, the company maintained a generally stable ability to meet short-term obligations. Periods of rising current assets, particularly during 2021 and 2022, may reflect strategic asset accumulation or operational patterns such as inventory buildup or higher receivables. The stable current liabilities alongside increasing current assets contributed to improved current ratios, which is a positive signal in terms of liquidity management.
Quick Ratio
Hubbell Inc., quick ratio calculation (quarterly data)
| 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 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||||||
| Accounts receivable, net of allowances | ||||||||||||||||||||||||||||||
| Total quick assets | ||||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||||
| Quick ratio1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||||||||
| Caterpillar Inc. | ||||||||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2023 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibited a general upward trend from March 2018 to September 2023. Starting at approximately 936 million USD in March 2018, the value increased with some fluctuations, reaching a low point around December 2019 at 879.2 million USD. Subsequently, a recovery phase was observed, with a notable rise peaking near 1.44 billion USD by September 2023. This indicates an overall strengthening in the company's liquid asset position over the analyzed period.
- Current Liabilities
- Current liabilities remained relatively stable with minor fluctuations between approximately 839 million USD and 1.15 billion USD. Initial values fluctuated modestly around 850 million to 940 million USD until 2020, after which there was a marked increase peaking at about 1.15 billion USD in March 2021. Following this peak, liabilities broadly stabilized near 1.07 billion USD towards the end of the period. This suggests a period of increased short-term obligations around early 2021, followed by stabilization.
- Quick Ratio
- The quick ratio demonstrated variability but generally stayed above 1.0, indicating that quick assets were sufficient to cover current liabilities at most times. Beginning at 1.04 in March 2018, the ratio improved, reaching highs of approximately 1.27 in September 2019 and 1.29 in June 2020. A dip was observed descending to 0.91 in December 2021, reflecting a period where liquid assets fell below short-term liabilities. Subsequently, the ratio recovered, achieving a peak of 1.35 in September 2023, signaling improved liquidity and financial resilience.
- Overall Analysis
- The data reveals that the company maintained a generally sound liquidity position throughout the review period, despite some volatility. The upward trend in total quick assets and the recovery in quick ratio after the 2021 dip suggest effective management of liquid resources relative to liabilities. The spike in current liabilities around early 2021 and the concurrent dip in quick ratio may warrant further investigation to understand the underlying causes. Overall, the company appears to have improved its ability to meet short-term obligations over the five-year span.
Cash Ratio
Hubbell Inc., cash ratio calculation (quarterly data)
| 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 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||||||
| Total cash assets | ||||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||||
| Cash ratio1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||||||||
| Caterpillar Inc. | ||||||||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2023 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets demonstrate significant fluctuations over the observed periods. Starting at 231,800 thousand US dollars in the first quarter of 2018, the amount exhibits an overall upward trend, with notable peaks in the second quarter of 2020 at 494,900 thousand and the first quarter of 2023 at 590,700 thousand. Despite intermittent decreases, such as the drop to 196,200 thousand in the final quarter of 2018, the overall trajectory indicates an increase in cash holdings over the years.
- Current Liabilities
- Current liabilities have remained relatively stable over the timeline, fluctuating primarily within the range of approximately 840,000 to 1,140,000 thousand US dollars. The earliest recorded value is 898,500 thousand in the first quarter of 2018, with moderate increases and decreases noted thereafter. The highest liabilities occur in the first quarter of 2021 at 1,148,700 thousand, followed by a general tendency to stabilize around the 1,050,000 to 1,080,000 thousand range in the most recent quarters.
- Cash Ratio
- The cash ratio, which is the quotient of total cash assets to current liabilities, reflects the company’s liquidity position and shows significant variability. Initially near 0.26 in early 2018, the cash ratio dips below 0.24 at times but reaches a marked increase in the second quarter of 2020 at 0.56, indicating a stronger liquidity position at that point. Post-2020, the ratio oscillates generally between 0.28 and 0.55, registering higher values in recent quarters (notably 0.55 in the third quarter of 2023), signifying improved ability to cover short-term liabilities with cash.
- Overall Trends and Insights
- The data implies a generally cautious but strengthening liquidity profile. Although current liabilities have stayed fairly constant without extreme fluctuations, strong growth in cash assets has contributed to an improving cash ratio. This suggests enhanced cash management or accumulation of liquid assets, which increases the firm's short-term financial flexibility. Temporary reductions in cash assets correspond with dips in the cash ratio but have been followed by recoveries indicating a cyclical pattern in cash management. The highest liquidity ratios coincide with periods of peak cash assets, notably during 2020 and the early 2023 quarters.