Avient Corp (AVNT)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.88 1.63 0.97 1.90 1.82 1.88 1.95 1.87 1.81 1.28 1.29 1.24 1.94 1.92 1.99 1.99 1.97 1.95 4.14 2.89
Quick ratio 0.72 0.57 0.33 0.61 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
Cash ratio 0.72 0.57 0.33 0.61 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

Avient Corp's current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown some fluctuation over the years. Starting from a high of 4.14 in June 2020, the current ratio gradually decreased to 0.97 in June 2024 before recovering slightly to 1.88 in December 2024. This downward trend indicates a potential decrease in the company's short-term liquidity position.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also displayed fluctuations. The quick ratio ranged from a high of 3.17 in June 2020 to a low of 0.33 in June 2024. This variability suggests that Avient Corp may face challenges in meeting its short-term obligations without relying on inventory sales.

Furthermore, the cash ratio, which indicates the proportion of current liabilities covered by cash and cash equivalents, mirrored the trends seen in the quick ratio. From a peak of 3.17 in June 2020, the cash ratio declined to 0.33 in June 2024 before rebounding to 0.72 in December 2024. This pattern highlights potential cash flow challenges that the company may have encountered during the period.

Overall, the liquidity ratios of Avient Corp indicate a need for closer monitoring of the company's ability to meet its short-term financial obligations. Investors and stakeholders should pay attention to these fluctuations and trends to assess the company's liquidity risk and financial health accurately.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 57.97 62.99 60.88 59.12 56.73 54.10 53.97 47.75 41.92 45.08 46.10 44.96 45.25 49.55 46.12 46.91 48.64 51.22 43.01 43.24

The cash conversion cycle of Avient Corp has shown some fluctuations over the past several quarters. The cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows, ranged from around 41 to 63 days during the period from March 31, 2020, to December 31, 2024.

In the most recent quarters, the cash conversion cycle was relatively stable, hovering around 45 to 47 days from March 31, 2022, to June 30, 2022. However, in the following quarters, there was a slight increase in the cycle length, reaching around 60 days by June 30, 2024.

A longer cash conversion cycle can indicate inefficiencies in managing inventory, collecting receivables, or paying suppliers. It is essential for the company to assess the reasons behind the lengthening cycle and take steps to optimize working capital management.

Overall, analyzing the trend in Avient Corp's cash conversion cycle provides insight into the efficiency of the company's operations in converting resources into cash, which is crucial for assessing liquidity and operational effectiveness.