Avantor Inc (AVTR)
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 | 1.07 | 1.54 | 1.59 | 1.61 | 1.61 | 1.60 | 1.61 | 1.57 | 1.60 | 1.65 | 1.64 | 1.80 | 1.71 | 2.70 | 1.76 | 1.80 | 1.80 | 2.02 | 2.18 | 1.95 |
| Quick ratio | 0.65 | 0.84 | 0.97 | 0.96 | 0.97 | 0.95 | 0.96 | 0.95 | 0.98 | 0.98 | 0.96 | 1.13 | 1.05 | 1.98 | 1.08 | 1.11 | 1.13 | 1.24 | 1.33 | 1.23 |
| Cash ratio | 0.13 | 0.18 | 0.20 | 0.18 | 0.19 | 0.18 | 0.17 | 0.19 | 0.24 | 0.19 | 0.15 | 0.20 | 0.21 | 1.08 | 0.16 | 0.14 | 0.23 | 0.33 | 0.39 | 0.31 |
Avantor Inc's liquidity ratios show fluctuations over the years.
- The current ratio improved from 1.95 as of March 31, 2020, to a peak of 2.70 as of September 30, 2021, indicating a strong ability to meet short-term obligations. However, it declined thereafter to 1.07 as of December 31, 2024, which may raise concerns about liquidity management.
- The quick ratio also exhibited variability, ranging from 1.98 as of September 30, 2021, to 0.65 as of December 31, 2024. This ratio considers only the most liquid assets, providing a more stringent view of short-term liquidity.
- The cash ratio increased significantly from 0.14 as of March 31, 2021, to 1.08 as of September 30, 2021, but declined thereafter to 0.13 as of December 31, 2024. This ratio reflects the company's ability to cover current liabilities with cash and cash equivalents.
Overall, while Avantor Inc demonstrated strong liquidity with improving ratios in the past, a downward trend in recent periods indicates a potential risk in meeting short-term obligations, highlighting the importance of effective cash management to maintain financial stability.
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 | 61.23 | 66.76 | 71.52 | 79.05 | 76.29 | 74.97 | 77.69 | 74.00 | 70.74 | 68.90 | 69.99 | 70.75 | 69.13 | 70.45 | 72.41 | 71.67 | 68.69 | 70.97 | 73.62 | 69.15 |
The cash conversion cycle (CCC) of Avantor Inc has shown some fluctuations over the periods analyzed. The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 61.23 days in December 2024 to a high of 79.05 days in March 31, 2024. This indicates that Avantor Inc was able to convert its investments into cash sales most efficiently in December 2024. On the other hand, the company took the longest time to convert its investments into cash sales in March 31, 2024.
Overall, the trend of the cash conversion cycle seems to have some variability, with fluctuations up and down throughout the periods. Companies typically aim to keep their cash conversion cycle as low as possible to optimize cash flow and liquidity. Avantor Inc should monitor and analyze the contributing factors to these fluctuations to ensure efficient operations and cash flow management.