Avient Corp (AVNT)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 545,800 | 641,100 | 601,200 | 649,500 | 864,700 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 399,900 | 440,600 | 642,300 | 516,600 | 330,000 |
| Total current liabilities | US$ in thousands | 773,600 | 869,400 | 940,600 | 801,000 | 702,500 |
| Quick ratio | 1.22 | 1.24 | 1.32 | 1.46 | 1.70 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($545,800K
+ $—K
+ $399,900K)
÷ $773,600K
= 1.22
The quick ratio of Avient Corp has shown a declining trend over the past five years, decreasing from 1.78 in 2019 to 1.37 in 2023. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets, excluding inventory. A quick ratio above 1 indicates that the company has enough liquid assets to cover its current liabilities.
Although the current quick ratio of 1.37 in 2023 is still above the ideal threshold of 1, the downward trend over the years indicates a potential deterioration in the company's liquidity position. It suggests that Avient Corp may be becoming less capable of meeting its short-term obligations using its readily available assets.
Further analysis of the company's overall liquidity position and cash flow management is recommended to determine the underlying factors contributing to the declining quick ratio and assess the impact on the company's financial health.
Peer comparison
Dec 31, 2023