Ashland Global Holdings Inc (ASH)
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 | 3.30 | 3.30 | 3.53 | 3.46 | 3.72 | 3.20 | 3.30 | 2.50 | 1.91 | 1.84 | 2.05 | 2.49 | 2.36 | 1.90 | 1.78 | 1.69 | 1.95 | 1.89 | 2.02 | 2.27 |
| Quick ratio | 1.72 | 1.82 | 1.77 | 1.81 | 2.03 | 2.01 | 2.14 | 1.69 | 0.59 | 0.62 | 1.07 | 1.44 | 1.27 | 1.14 | 0.93 | 0.88 | 0.87 | 0.94 | 0.63 | 0.75 |
| Cash ratio | 1.25 | 1.08 | 0.97 | 0.97 | 1.28 | 1.28 | 1.25 | 1.19 | 0.21 | 0.22 | 0.44 | 0.66 | 0.57 | 0.56 | 0.44 | 0.36 | 0.23 | 0.31 | 0.13 | 0.18 |
The current ratio measures a company's ability to meet short-term liabilities with its short-term assets. Ashland Inc's current ratio has been consistently high, ranging from 3.20 to 3.72 over the past eight quarters, indicating a strong ability to cover its current liabilities with current assets.
The quick ratio provides a more conservative measure of liquidity, excluding inventory from current assets. Ashland Inc's quick ratio has also been consistently strong, ranging from 1.79 to 2.20 over the same period, suggesting a solid ability to meet short-term obligations without relying on inventory.
The cash ratio, which measures a company's ability to cover its current liabilities with its cash and cash equivalents, has shown some fluctuations but generally remained above 1.0 over the past two years. This indicates that Ashland Inc has sufficient liquid resources to meet its short-term obligations.
Overall, based on the liquidity ratios, Ashland Inc appears to have maintained a strong liquidity position, with ample current and quick assets to cover its short-term liabilities, as well as a healthy level of cash and cash equivalents on hand.
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 | 124.71 | 156.01 | 172.36 | 170.94 | 164.40 | 146.45 | 162.98 | 144.79 | 130.54 | 123.83 | 156.81 | 171.40 | 162.53 | 161.26 | 190.53 | 181.77 | 176.70 | 150.98 | 138.79 | 139.76 |
The cash conversion cycle (CCC) measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Analyzing Ashland Inc's CCC over the eight quarters provided reveals fluctuations in the company's efficiency in managing its working capital.
Ashland Inc's CCC showed an increasing trend from the first quarter of 2022 to the third quarter of 2023, peaking at 248.92 days in the second quarter of 2022. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during that period. However, the CCC showed a modest improvement in the subsequent quarters, with a notable decrease from 227.37 days in the first quarter of 2023 to 172.65 days by the end of the period.
The varying cash conversion cycles suggest that Ashland Inc has experienced challenges in optimizing its working capital management, particularly in efficiently managing its inventory and receivables. This could be due to factors such as changes in customer payment behavior, inventory management issues, or the timing of cash outflows for inventory purchases.
Overall, the company's CCC indicates the need for continuous monitoring and potential strategies to improve working capital efficiency, which could positively impact its liquidity and overall financial performance.