Avient Corp (AVNT)

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 1.82 1.88 1.95 1.87 1.81 1.28 1.29 1.24 1.94 1.92 1.99 1.99 2.00 1.95 4.14 2.89 2.15 1.88 1.68 1.81
Quick ratio 1.22 1.21 1.33 1.27 1.24 0.67 0.89 0.85 1.32 1.30 1.41 1.43 1.46 1.42 3.66 2.42 1.70 0.91 0.99 1.03
Cash ratio 0.71 0.60 0.68 0.70 0.74 0.35 0.41 0.36 0.64 0.57 0.66 0.69 0.81 0.75 3.17 1.86 1.23 0.32 0.21 0.19

Avient Corp's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, have shown varying levels over the past eight quarters. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has generally been above 1, indicating that Avient Corp has had sufficient current assets to cover current liabilities. The current ratio has shown some fluctuations, with Q2 and Q3 of 2023 reaching higher levels compared to previous quarters.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Avient Corp's quick ratio has also been above 1 in most quarters, suggesting that the company has enough liquid assets to cover its short-term liabilities without relying on inventory. The quick ratio has shown a similar pattern of fluctuations, with Q2 and Q3 of 2023 exhibiting higher ratios compared to earlier periods.

The cash ratio, which is the most conservative measure of liquidity, focuses solely on cash and cash equivalents as a proportion of current liabilities. Avient Corp's cash ratio has generally been below 1, indicating that the company may not have enough cash on hand to cover its immediate liabilities if needed. However, the cash ratio has shown improvement over the quarters, increasing from Q1 2022 to Q1 2023.

Overall, Avient Corp's liquidity ratios demonstrate a generally healthy liquidity position, with the current and quick ratios consistently above 1 in most periods. However, the company may need to continue monitoring its cash reserves to ensure it has sufficient liquid assets to meet short-term obligations, especially in times of economic uncertainty.

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 38.04 39.53 42.37 34.74 27.30 40.02 44.58 43.57 39.41 49.49 46.00 46.61 42.27 50.34 38.83 37.69 34.44 39.63 43.22 45.57

The cash conversion cycle of Avient Corp has exhibited some fluctuations over the past eight quarters. In Q3 2023, the company had a significantly longer cash conversion cycle of 57.47 days compared to the previous quarter's 32.61 days. This marked increase indicates that Avient Corp took longer to convert its investments in inventory into cash during this period.

Additionally, Q3 2023's cash conversion cycle was higher than the figures reported in Q4 2022 and Q1 2023, suggesting a potential operational inefficiency or changes in the company's working capital management strategies. However, it is worth noting that Q3 2023's cycle was still lower than Q2 2023, which had the highest cycle of 59.82 days in the past eight quarters.

On the positive side, Q4 2022 had the shortest cash conversion cycle of 35.48 days, indicating that Avient Corp was able to efficiently manage its working capital and convert inventory into cash relatively quickly during that period. Overall, it is important for the company to closely monitor its cash conversion cycle and working capital management practices to optimize efficiency and liquidity in its operations.