Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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).
The analysis of liquidity ratios over the examined quarters reveals several noteworthy trends.
- Current Ratio
- The current ratio demonstrated a gradual increase from March 2019, starting at 1.95, reaching a peak of 2.09 in September 2019. This was followed by a decline to 1.67 by December 2020, indicating a reduction in current assets relative to current liabilities during this period. Subsequently, the ratio stabilized around the mid-1.7 range until early 2022, after which it increased again, surpassing 2.00 in mid-2022. The most recent data shows a positive trend, reaching 2.16 by September 2023, suggesting an improved ability to cover short-term obligations.
- Quick Ratio
- The quick ratio followed a similar pattern, increasing from 1.10 in early 2019 to a high of 1.29 around mid-2020. However, it then decreased to a low of 0.91 by December 2021, indicating potential challenges in quickly liquidating assets without relying on inventory. After this low point, the quick ratio rebounded, climbing steadily to 1.35 by the latest quarter. This improvement highlights enhanced liquidity excluding inventory.
- Cash Ratio
- The cash ratio also exhibited fluctuations, initially modest at 0.25 in early 2019. It rose significantly during 2020, peaking at 0.56 mid-year, reflecting increased cash and cash equivalents. Following this peak, the ratio decreased somewhat but remained elevated relative to the initial periods. Recent quarters show a consistent upward movement, with the ratio reaching 0.55 by September 2023, indicating stronger immediate liquidity through cash holdings.
Overall, liquidity metrics display a cyclical behavior with a dip during late 2020 and 2021, possibly reflecting broader economic or operational challenges. The recovery and improvement across all ratios in the most recent quarters suggests enhanced liquidity management and a stronger short-term financial position. The increasing trend in the cash ratio, in particular, points to a more conservative cash management approach, providing a robust buffer against short-term liabilities.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Current assets | 2,318,400) | 2,205,800) | 2,098,700) | 2,021,400) | 1,994,500) | 2,034,200) | 1,927,100) | 1,879,300) | 1,833,200) | 1,745,100) | 1,827,500) | 1,587,600) | 1,640,400) | 1,793,600) | 1,675,000) | 1,574,200) | 1,809,900) | 1,729,000) | 1,650,600) | ||||||
| Current liabilities | 1,071,400) | 1,069,800) | 1,052,100) | 1,088,500) | 1,062,500) | 1,002,900) | 962,100) | 1,065,200) | 1,035,400) | 999,400) | 1,148,700) | 948,200) | 792,700) | 880,700) | 841,300) | 844,900) | 866,200) | 874,100) | 847,900) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Current ratio1 | 2.16 | 2.06 | 1.99 | 1.86 | 1.88 | 2.03 | 2.00 | 1.76 | 1.77 | 1.75 | 1.59 | 1.67 | 2.07 | 2.04 | 1.99 | 1.86 | 2.09 | 1.98 | 1.95 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | 1.15 | 1.17 | 1.16 | 1.22 | 1.22 | 1.25 | 1.30 | 1.33 | 1.36 | 1.35 | 1.33 | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 1.45 | 1.33 | 1.43 | 1.39 | 1.41 | 1.45 | 1.44 | 1.46 | 1.61 | 1.56 | 1.60 | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | 1.45 | 1.53 | 1.50 | 1.38 | 1.28 | 0.97 | 0.99 | 1.04 | 1.27 | 1.10 | 1.51 | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | 1.17 | 1.25 | 1.25 | 1.16 | 1.10 | 1.13 | 1.19 | 1.28 | 1.80 | 1.81 | 1.96 | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | 1.35 | 1.41 | 1.26 | 1.25 | 1.24 | 1.20 | 1.21 | 1.30 | 1.29 | 1.41 | 1.43 | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | 1.36 | 1.36 | 1.30 | 1.32 | 1.28 | 1.27 | 1.27 | 1.42 | 1.42 | 1.36 | 1.38 | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | 1.03 | 1.10 | 1.13 | 1.09 | 1.09 | 1.10 | 1.16 | 1.19 | 1.23 | 1.17 | 1.17 | — | — | — | — | — | — | — | — | ||||||
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).
1 Q3 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= 2,318,400 ÷ 1,071,400 = 2.16
2 Click competitor name to see calculations.
The analysis of quarterly financial data reveals several notable trends in liquidity and working capital management. Current assets have generally shown a gradual increase over the period, rising from approximately 1,650,600 thousand US dollars at the beginning of 2019 to roughly 2,318,400 thousand US dollars by September 2023. This growth indicates an accumulation of assets that are expected to be converted into cash or used within one year.
Current liabilities have experienced some fluctuations but have remained relatively stable over the same period. Starting at around 847,900 thousand US dollars in March 2019, liabilities peaked at approximately 1,088,500 thousand US dollars in December 2022 before settling near 1,071,400 thousand US dollars in the third quarter of 2023. The variability in current liabilities denotes some changes in short-term obligations, which may be related to operational cycles or financing activities.
Examining the current ratio, which measures a company’s ability to cover short-term obligations with short-term assets, a pattern of moderate fluctuations is observed. The ratio started at 1.95 in early 2019, briefly rising to above 2.0 in mid-2019 and mid-2020, then declining to around 1.59 by the first quarter of 2021, indicating a tighter liquidity position during that period. Since mid-2021, the current ratio has generally improved and stabilized above 1.75, reaching 2.16 in the latest quarter analyzed.
Overall, the data indicates a strengthening liquidity position over the long term with an increasing buffer of current assets against current liabilities. Periods of lower current ratios coincided with either increased liabilities or slower growth in current assets, suggesting some short-term pressure on liquidity. The recent upward trend in the current ratio combined with steady growth in current assets points to improved working capital management and a more comfortable liquidity posture as of the most current quarter.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Cash and cash equivalents | 572,800) | 492,600) | 429,800) | 440,500) | 366,900) | 424,200) | 359,000) | 286,200) | 257,900) | 265,400) | 433,800) | 259,600) | 269,200) | 485,000) | 300,000) | 182,000) | 300,000) | 209,900) | 205,300) | ||||||
| Short-term investments | 17,900) | 16,200) | 17,000) | 14,300) | 12,500) | 13,900) | 12,400) | 9,400) | 9,900) | 12,600) | 10,200) | 9,300) | 9,000) | 9,900) | 13,500) | 14,200) | 11,300) | 10,500) | 9,500) | ||||||
| Accounts receivable, net of allowances | 852,900) | 811,200) | 778,300) | 741,600) | 800,500) | 780,500) | 777,900) | 675,300) | 798,300) | 762,300) | 703,100) | 634,700) | 711,400) | 644,100) | 707,700) | 683,000) | 787,100) | 785,500) | 716,200) | ||||||
| Total quick assets | 1,443,600) | 1,320,000) | 1,225,100) | 1,196,400) | 1,179,900) | 1,218,600) | 1,149,300) | 970,900) | 1,066,100) | 1,040,300) | 1,147,100) | 903,600) | 989,600) | 1,139,000) | 1,021,200) | 879,200) | 1,098,400) | 1,005,900) | 931,000) | ||||||
| Current liabilities | 1,071,400) | 1,069,800) | 1,052,100) | 1,088,500) | 1,062,500) | 1,002,900) | 962,100) | 1,065,200) | 1,035,400) | 999,400) | 1,148,700) | 948,200) | 792,700) | 880,700) | 841,300) | 844,900) | 866,200) | 874,100) | 847,900) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Quick ratio1 | 1.35 | 1.23 | 1.16 | 1.10 | 1.11 | 1.22 | 1.19 | 0.91 | 1.03 | 1.04 | 1.00 | 0.95 | 1.25 | 1.29 | 1.21 | 1.04 | 1.27 | 1.15 | 1.10 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | 0.28 | 0.28 | 0.29 | 0.32 | 0.29 | 0.28 | 0.29 | 0.34 | 0.38 | 0.38 | 0.37 | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 0.76 | 0.74 | 0.79 | 0.79 | 0.78 | 0.81 | 0.84 | 0.89 | 1.00 | 1.02 | 1.08 | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | 0.84 | 0.85 | 0.78 | 0.73 | 0.65 | 0.50 | 0.51 | 0.54 | 0.69 | 0.44 | 0.66 | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | 0.76 | 0.84 | 0.86 | 0.81 | 0.73 | 0.75 | 0.82 | 0.93 | 0.90 | 0.90 | 1.06 | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | 0.92 | 0.98 | 0.84 | 0.88 | 0.85 | 0.82 | 0.84 | 0.94 | 0.96 | 1.06 | 1.08 | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | 1.14 | 1.14 | 1.07 | 1.09 | 1.06 | 1.03 | 1.03 | 1.15 | 1.18 | 1.10 | 1.09 | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | 0.63 | 0.68 | 0.71 | 0.69 | 0.70 | 0.71 | 0.76 | 0.81 | 0.82 | 0.79 | 0.79 | — | — | — | — | — | — | — | — | ||||||
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).
1 Q3 2023 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 1,443,600 ÷ 1,071,400 = 1.35
2 Click competitor name to see calculations.
- Total Quick Assets
-
Total quick assets demonstrate a generally increasing trend over the observed periods. Starting at 931 million USD in the first quarter of 2019, the value peaked multiple times, reaching approximately 1.44 billion USD by the third quarter of 2023. Notable declines occurred in the fourth quarter of 2019 and the latter part of 2020, but overall the trajectory is upward, indicating an improvement in liquid asset levels available for meeting short-term obligations.
- Current Liabilities
-
Current liabilities exhibit moderate fluctuations throughout the timeline. The level of liabilities was about 848 million USD in the first quarter of 2019, rising to over 1.14 billion USD by the first quarter of 2021. Following that peak, current liabilities stabilized around the 1.0 to 1.08 billion USD range through 2022 and into 2023. This pattern suggests an increase in short-term obligations during early 2021, before leveling off in subsequent periods.
- Quick Ratio
-
The quick ratio shows variability around the critical value of 1.0, reflecting changes in the company's short-term liquidity. It starts at 1.1 in early 2019, improves to a high of 1.29 in the second quarter of 2020, but dips below 1.0 during the end of 2020 and into 2021, reaching a low of 0.91 in the fourth quarter of 2021. Afterward, the quick ratio recovers steadily to 1.35 by the third quarter of 2023. This trend indicates periods of tighter liquidity in late 2020 and 2021, followed by strengthened liquidity management leading to a healthier quick ratio well above 1.0 in the most recent quarters.
- Overall Analysis
-
During the observed period, the company improved its liquidity position overall, as evidenced by increasing total quick assets and a recovering quick ratio. While current liabilities increased significantly entering 2021, the company managed to stabilize those levels later. The temporary dip in the quick ratio below 1.0 might have signaled short-term liquidity challenges that were effectively addressed in subsequent quarters. The upward trend in quick assets alongside steady liabilities has contributed to a stronger liquidity profile, enhancing the company’s ability to meet immediate financial obligations in recent periods.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Cash and cash equivalents | 572,800) | 492,600) | 429,800) | 440,500) | 366,900) | 424,200) | 359,000) | 286,200) | 257,900) | 265,400) | 433,800) | 259,600) | 269,200) | 485,000) | 300,000) | 182,000) | 300,000) | 209,900) | 205,300) | ||||||
| Short-term investments | 17,900) | 16,200) | 17,000) | 14,300) | 12,500) | 13,900) | 12,400) | 9,400) | 9,900) | 12,600) | 10,200) | 9,300) | 9,000) | 9,900) | 13,500) | 14,200) | 11,300) | 10,500) | 9,500) | ||||||
| Total cash assets | 590,700) | 508,800) | 446,800) | 454,800) | 379,400) | 438,100) | 371,400) | 295,600) | 267,800) | 278,000) | 444,000) | 268,900) | 278,200) | 494,900) | 313,500) | 196,200) | 311,300) | 220,400) | 214,800) | ||||||
| Current liabilities | 1,071,400) | 1,069,800) | 1,052,100) | 1,088,500) | 1,062,500) | 1,002,900) | 962,100) | 1,065,200) | 1,035,400) | 999,400) | 1,148,700) | 948,200) | 792,700) | 880,700) | 841,300) | 844,900) | 866,200) | 874,100) | 847,900) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Cash ratio1 | 0.55 | 0.48 | 0.42 | 0.42 | 0.36 | 0.44 | 0.39 | 0.28 | 0.26 | 0.28 | 0.39 | 0.28 | 0.35 | 0.56 | 0.37 | 0.23 | 0.36 | 0.25 | 0.25 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | 0.14 | 0.15 | 0.16 | 0.19 | 0.16 | 0.14 | 0.15 | 0.20 | 0.23 | 0.24 | 0.24 | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 0.20 | 0.21 | 0.21 | 0.22 | 0.21 | 0.21 | 0.22 | 0.31 | 0.36 | 0.39 | 0.43 | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | 0.25 | 0.20 | 0.09 | 0.09 | 0.08 | 0.07 | 0.06 | 0.08 | 0.11 | 0.06 | 0.20 | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | 0.42 | 0.49 | 0.52 | 0.44 | 0.35 | 0.37 | 0.44 | 0.54 | 0.52 | 0.50 | 0.67 | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | 0.46 | 0.51 | 0.40 | 0.51 | 0.44 | 0.43 | 0.49 | 0.59 | 0.60 | 0.68 | 0.71 | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | 0.21 | 0.21 | 0.14 | 0.16 | 0.15 | 0.11 | 0.12 | 0.26 | 0.18 | 0.18 | 0.20 | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | 0.12 | 0.13 | 0.15 | 0.16 | 0.14 | 0.13 | 0.17 | 0.22 | 0.22 | 0.23 | 0.24 | — | — | — | — | — | — | — | — | ||||||
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).
1 Q3 2023 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 590,700 ÷ 1,071,400 = 0.55
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in liquidity and short-term financial position over the observed periods.
- Total Cash Assets
- The total cash assets exhibit significant fluctuations but display an overall upward trend from the beginning of the period to the most recent quarter. Initially, cash assets were approximately US$215 million, rising with some volatility to nearly US$591 million at the end of the latest quarter. Notably, there were substantial increases during mid-2020 and from early 2022 onwards, with peaks observed in June 2020, June 2022, and the latest reported quarter, September 2023. Some quarters exhibited declines, but these were not sustained, indicating an improving liquidity position over time.
- Current Liabilities
- Current liabilities remained relatively stable with some moderate increases across the time frame. Starting around US$848 million, current liabilities fluctuated but generally ranged between US$800 million and US$1.1 billion. There was a slight uptrend around 2021 and 2022, peaking in the fourth quarter of 2022. The fluctuations suggest ongoing operational funding requirements but without dramatic shifts, reflecting a relatively steady short-term obligation profile.
- Cash Ratio
- The cash ratio, representing the company's ability to cover current liabilities with cash assets, demonstrated improvement over the period. Beginning at about 0.25, the ratio experienced rises and dips corresponding with the fluctuations in cash assets and liabilities. A notable improvement was observed in mid-2020, with the ratio reaching above 0.5 at that time, followed by some decreases. From early 2022 onwards, the cash ratio again improved steadily, reaching 0.55 by the latest quarter, indicating enhanced liquidity and a stronger capacity to meet short-term obligations solely with cash.
In summary, the data indicate that the company has been increasing its cash reserves relative to its current liabilities, thereby improving its cash ratio over time. While there are periods of volatility in cash assets, the overall movement points toward better short-term liquidity management. The current liabilities remain within a fairly narrow range, implying consistent operational scale or financing needs. The upward trajectory in the cash ratio suggests a strengthening ability to cover immediate liabilities with readily available cash, which could be favorable for operational flexibility and financial stability.