Ashland Global Holdings Inc (ASH)

The liquidity ratios of Ashland Global Holdings Inc show the company's ability to meet its short-term obligations and manage its current assets effectively.

1. Current Ratio: The current ratio has been relatively healthy over the years. A current ratio above 1 indicates that the company has more current assets than current liabilities. Ashland Global's current ratio has ranged from 1.84 to 3.30 in the past five years, with the latest figure standing at 2.44 as of September 30, 2024. This suggests that the company has ample current assets to cover its short-term liabilities.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Ashland Global's quick ratio has also been at acceptable levels, ranging from 0.66 to 2.01 over the past five years. A quick ratio above 1 indicates that the company can meet its current liabilities without relying on the sale of inventory. The latest figure of 1.26 (as of September 30, 2024) indicates that the company has a comfortable cushion of liquid assets to cover its short-term obligations.

3. Cash Ratio: The cash ratio measures the company's ability to pay off its current liabilities using only its cash and cash equivalents. Ashland Global's cash ratio has shown some volatility, ranging from 0.26 to 1.28 over the past five years. The latest figure of 0.76 (as of September 30, 2024) indicates that the company may need to use other current assets or obtain financing to meet its short-term obligations in a tight liquidity situation.

Overall, Ashland Global Holdings Inc's liquidity ratios reflect a generally sound liquidity position over the years, with sufficient current assets to cover its short-term liabilities. However, management should continue to monitor and manage cash flow effectively to ensure the company can meet its financial obligations when due.

---

Additional liquidity measure

The cash conversion cycle of Ashland Global Holdings Inc has shown some fluctuations over the past five years. In the most recent fiscal year ending September 30, 2024, the company managed to reduce its cash conversion cycle to 122.79 days, indicating an improvement in managing its working capital compared to the previous year.

In the preceding fiscal year, ending September 30, 2023, the cash conversion cycle increased to 156.01 days, demonstrating a decrease in efficiency in converting its investments in inventory and receivables into cash. This was a reversal from the trend observed in the fiscal year ending September 30, 2022, where the cash conversion cycle had decreased to 146.48 days, showing better working capital management compared to the fiscal year ending September 30, 2021.

The cash conversion cycle in the fiscal year ending September 30, 2021, was 123.83 days, a notable improvement from the previous year, which had a cash conversion cycle of 161.26 days. This reduction in the cash conversion cycle suggests that the company was able to streamline its operations to convert inventory and receivables into cash more efficiently.

Overall, analyzing the trend over the past five years, despite some fluctuations, Ashland Global Holdings Inc has shown efforts to improve its cash conversion cycle with a notable decrease in the most recent fiscal year. This indicates a potential enhancement in the company's working capital management and operational efficiency.