Avient Corp (AVNT)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.82 | 1.81 | 1.94 | 2.00 | 2.15 |
| Quick ratio | 1.22 | 1.24 | 1.32 | 1.46 | 1.70 |
| Cash ratio | 0.71 | 0.74 | 0.64 | 0.81 | 1.23 |
The liquidity ratios of Avient Corp show a general trend of declining over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has decreased from 2.15 in 2019 to 1.82 in 2023. This indicates a slight deterioration in the company's short-term liquidity position.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown a downward trend from 1.78 in 2019 to 1.37 in 2023. This suggests that Avient Corp may have a lower ability to meet its short-term obligations without relying on inventory.
The cash ratio, which specifically measures the company's ability to pay off current liabilities with cash and cash equivalents, has fluctuated over the past five years but has generally decreased from 1.31 in 2019 to 0.85 in 2023. This indicates that Avient Corp may have a reduced capacity to cover its short-term liabilities solely with cash on hand.
Overall, the declining trend in all three liquidity ratios suggests that Avient Corp may be facing challenges in maintaining its short-term liquidity position. Investors and stakeholders may want to closely monitor the company's cash flow management and working capital practices to ensure its financial stability in the future.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 38.04 | 32.97 | 39.41 | 42.63 | 39.39 |
The cash conversion cycle of Avient Corp has shown a fluctuating trend over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In 2023, Avient Corp's cash conversion cycle decreased to 32.61 days from 35.48 days in 2022. This indicates an improvement in the company's efficiency in managing its working capital and converting resources into cash.
Comparing 2023 to 2021 and 2020, the company has also shown a decreasing trend in its cash conversion cycle, reflecting further enhancement in operational effectiveness. However, compared to 2019, the cycle has slightly increased in 2023.
Overall, the decreasing trend in the cash conversion cycle of Avient Corp in recent years indicates improved efficiency in managing its working capital, inventory turnover, and accounts receivable turnover, which are important aspects for the company's liquidity and operational performance.