Builders FirstSource Inc. (NYSE:BLDR)

Current Ratio

The current ratio displays moderate fluctuations across the reported periods. Initially, values decreased slightly from 1.88 in March 2019 to a low of 1.59 in December 2019, indicating a reduced ability to cover short-term liabilities with current assets. Subsequently, there was a marked improvement through 2020, peaking at 2.07 in December 2020, which reflects stronger liquidity during that year. Over the next periods from 2021 through 2023, the ratio trends downward incrementally, stabilizing between approximately 1.76 and 2.09, suggesting a consistent but slightly declining short-term liquidity position.

Quick Ratio

The quick ratio similarly shows an upward trend from under 1.0 in 2019 to levels above 1.0 beginning in early 2020, indicating an improvement in liquid assets relative to current liabilities. This transition from values around 0.86-0.96 in 2019 to a peak of 1.28 in December 2020 signifies strengthening liquidity excluding inventory. Post-2020, the ratio remains relatively stable between 1.0 and 1.24 with some minor declines, reflecting maintenance of a solid liquid asset base through 2021 to 2023 despite slight fluctuations.

Cash Ratio

The cash ratio exhibits more pronounced variability and generally low values throughout the timeline, highlighting a limited level of cash or cash equivalents relative to current liabilities. Initial values in 2019 are very low, approaching zero, with a significant rise during mid to late 2020 reaching a peak of 0.41 in June 2020. This suggests a short period of increased cash liquidity that was not sustained. Subsequent quarters see a decline and stabilization at lower levels around 0.02 to 0.11, indicating that cash reserves remained a small fraction of short-term obligations in most periods.

The analysis of the quarterly financial metrics reveals distinct patterns in the liquidity position over the observed periods. The current assets display a general upward trend from early 2019 through mid-2021, indicating an accumulation of liquid resources or short-term assets. This growth peaks in the second quarter of 2021, followed by periods of fluctuation and a gradual decline starting from early 2022 onwards, suggesting some asset optimization or utilization in operations.

Conversely, current liabilities also exhibit an overall increasing trend, particularly marked from early 2020 through 2021, reflecting a rise in short-term obligations. The peak in current liabilities coincides with or slightly trails the peak in current assets, suggesting a period of increased operational activity or financing. Post-peak, liabilities demonstrate a downward adjustment beginning in late 2021, aligning with the reduction of current assets in subsequent quarters.

The current ratio, a key liquidity indicator, oscillates correspondingly with changes in assets and liabilities. Initial values around 1.6 to 1.9 indicate acceptable liquidity levels, which improved notably during 2020, reaching above 2.0 for several quarters. This rise in the current ratio reflects an enhanced capacity to cover short-term liabilities with current assets during that timeframe. However, from late 2021 onward, the ratio trends downwards, settling close to 1.7 by the last reported quarter, which could imply tighter liquidity conditions or a strategic shift to more efficient capital deployment.

In summary, the financial data elucidate a phase of asset and liability expansion up to mid-2021, accompanied by improving liquidity ratios, followed by a period of contraction and moderation of the liquidity position through 2022 and 2023. These dynamics may reflect operational responses to market conditions, capital structure adjustments, or evolving management strategies aimed at optimizing working capital efficiency.

Current Assets

Generally increased from early 2019 through mid-2021, peaking in Q2 2021, followed by variability and a declining trend into 2023.

Current Liabilities

Increased substantially from early 2020 until 2021 peaking near the peak of assets, then decreased moderately through 2023.

Current Ratio

Improved from about 1.6-1.9 to above 2.0 during 2020-2021, indicating stronger liquidity, but declined toward 1.7 by late 2023, suggesting tightening liquidity.

Trend in Total Quick Assets

The total quick assets displayed a generally increasing trend from March 2019 through March 2022, rising from approximately 711 million to over 3 billion US dollars. After peaking in the first quarter of 2022, total quick assets showed a decline through the end of 2022, reaching below 2 billion by December 2022. In 2023, the values slightly stabilized, fluctuating around 2.1 billion US dollars.

Trend in Current Liabilities

Current liabilities increased steadily from March 2019 to March 2022, starting near 738 million and growing to over 2.68 billion US dollars. This peak was followed by a downward movement through the remainder of 2022, declining to approximately 1.84 billion US dollars by December 2022. Throughout 2023, current liabilities exhibited moderate increases, ending near 2.03 billion US dollars in the most recent quarter.

Quick Ratio Analysis

The quick ratio experienced fluctuations within a range approximately between 0.86 and 1.28 over the observed periods. Notably, it declined below 1.0 in the latter half of 2019 but improved significantly afterward, exceeding 1.0 consistently from March 2020 onwards until the end of 2023. The peak quick ratio occurred in December 2020 at 1.28. In subsequent years, the quick ratio remained above 1.0 but showed slight fluctuation, dropping close to 1.03 in June 2023 before increasing again to approximately 1.10 in September 2023.

Overall Insights

The data indicate an expansion of liquid assets alongside growing current liabilities up until early 2022, suggesting increased operational scale or capital utilization. The quick ratio staying near or above 1.0 in most recent years reflects a maintained liquidity buffer, with quick assets generally sufficient to cover current liabilities. The reductions in both quick assets and liabilities through late 2022 may point to a strategic adjustment or normalization after growth, with a stabilization pattern developing in 2023. The consistent quick ratio above 1.0 implies prudent short-term financial health, although slight variations highlight ongoing management of liquidity conditions.

Total Cash Assets

The total cash assets demonstrate significant fluctuations over the examined periods. Initially, cash assets were relatively low and stable, ranging from around 10,000 to 43,000 thousand US dollars in 2019. A notable surge occurred during 2020, with cash reaching a peak of over 423,000 thousand US dollars in the fourth quarter. This sharp increase suggests a period of strong liquidity or capital inflow. However, following this peak, cash levels declined markedly in 2021, dropping back below 50,000 thousand US dollars by the end of that year. In 2022 and early 2023, cash assets again increased, with values mostly fluctuating between approximately 80,000 and 280,000 thousand US dollars, indicating some recovery in liquidity but with continued volatility.

Current Liabilities

Current liabilities show a clear upward trend over the entire timeframe. Starting at around 737,000 thousand US dollars in the first quarter of 2019, liabilities gradually increased through 2019 and 2020, reaching over 1,000,000 thousand US dollars by the end of 2020. Subsequently, there was a sharp rise in 2021, with liabilities doubling to exceed 2,000,000 thousand US dollars in several quarters. The liabilities peaked above 2,680,000 thousand US dollars in early 2022 before declining somewhat in late 2022 and early 2023 but remained substantially higher than in prior years, generally around 1,800,000 to 2,000,000 thousand US dollars. This pattern indicates a substantial increase in short-term obligations over the period, potentially reflecting increased operational demands or financing activities.

Cash Ratio

The cash ratio follows trends consistent with changes in cash assets relative to current liabilities. It was very low around 0.01 to 0.05 in the early periods of 2019, indicating minimal cash coverage of current liabilities. In 2020, the ratio improved significantly, reaching a high of 0.41 in the second quarter, reflecting the cash asset peak and relative to liabilities at that time. This improvement in liquidity was temporary, as the ratio declined sharply again in 2021 to values as low as 0.01-0.02, reflecting the sharp increase in liabilities combined with a reduction in cash assets. While there were modest recoveries in 2022 and 2023, with ratios occasionally reaching 0.08 to 0.11, overall cash coverage of current liabilities remains low, suggesting a continued tight liquidity position when considering short-term obligations.