Albemarle Corp (ALB)

Liquidity ratios

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 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 1.47 1.81 1.74 1.90 1.89 1.73 1.88 1.11 1.06 1.31 2.18 2.11 1.22 1.38 1.61 1.81 1.58 1.39 1.45 1.55
Quick ratio 0.95 0.90 0.83 0.98 1.13 1.03 1.13 0.57 1.11 1.30 2.28 1.92 0.79 0.79 0.94 0.96 1.01 0.73 0.81 0.88
Cash ratio 0.30 0.47 0.42 0.50 0.55 0.56 0.52 0.22 0.71 0.94 1.76 1.29 0.41 0.44 0.52 0.46 0.44 0.22 0.28 0.36

Albemarle Corp.'s liquidity ratios display fluctuations over the recent quarters, reflecting changes in the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its current liabilities with current assets, has been relatively stable, ranging from 1.47 to 1.90. A current ratio above 1 indicates that the company can meet its short-term obligations.

In contrast, the quick ratio, or acid-test ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has shown greater variation, dropping from 1.13 in Q4 2022 to 0.86 in Q4 2023. This suggests a potential weakening in the company's ability to meet its short-term obligations without relying on inventory.

The cash ratio, which indicates the company's ability to cover its current liabilities with cash and cash equivalents, has also fluctuated, ranging from 0.28 to 0.61. A higher cash ratio is generally preferred as it signifies a stronger ability to settle immediate liabilities with available cash on hand.

Overall, while Albemarle Corp. maintains current ratios above 1, indicating a healthy liquidity position, the declining trend in quick and cash ratios may warrant further analysis to assess the company's short-term liquidity management and potential implications for financial stability.

See also:

Albemarle Corp Liquidity Ratios (Quarterly Data)

Additional liquidity measure

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 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 181.22 240.82 297.81 175.86 125.94 72.23 107.70 98.58 111.74 95.46 90.83 99.31 125.36 125.87 117.49 106.75 112.31 119.17 120.21 116.85

The cash conversion cycle of Albemarle Corp. has exhibited fluctuations over the past two years. In Q4 2023, the company's cash conversion cycle was 72.82 days, showing an improvement from the previous quarter's 104.69 days. This suggests that Albemarle was able to more efficiently convert its investments in raw materials and inventory into sales and eventual cash receipts during the most recent quarter.

Comparing the latest data to the same period in the previous year, there has been an overall reduction in the cash conversion cycle, as Q4 2022 recorded a cycle of 74.30 days. This indicates a positive trend in managing working capital and shows that Albemarle has been able to streamline its operations to speed up the cash conversion process.

Furthermore, the company experienced higher cash conversion cycles in Q2 and Q3 of 2022, at 105.15 and 107.70 days respectively, which may have been influenced by factors such as changes in inventory management or payment terms. However, Albemarle managed to bring down the cycle in subsequent quarters.

Overall, the trend in Albemarle Corp.'s cash conversion cycle reflects efforts to enhance efficiency in working capital management, leading to improved cash flow and potentially better financial performance. Monitoring these trends over time can provide insights into the company's operational effectiveness and liquidity management.