Avantor Inc (AVTR)

Liquidity ratios

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 1.59 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 1.88 1.87
Quick ratio 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 1.09 1.07
Cash ratio 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 0.17 0.16

Avantor Inc's liquidity ratios show some fluctuations over the periods examined. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 1, indicating that the company has been able to meet its short-term obligations. However, there has been a slight decrease in the current ratio from 1.87 in March 2022 to 1.59 in June 2024.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also displayed fluctuations but remained below 1 for most periods. This suggests that Avantor Inc may have difficulty meeting its short-term obligations using only its most liquid assets. The quick ratio improved in some periods, such as December 2022 and March 2023 when it exceeded 1.

The cash ratio, which is the most conservative liquidity ratio as it considers only cash and cash equivalents, has shown significant variability over the periods. Notably, there was a sharp increase in the cash ratio to 1.08 in March 2022, indicating a strong cash position. However, the ratio fluctuated and decreased to 0.20 in June 2024, indicating a lower ability to cover current liabilities with cash assets.

Overall, Avantor Inc's liquidity ratios suggest that while the company has generally maintained a reasonable ability to cover its short-term obligations, there have been fluctuations in liquidity levels over time. Investors and stakeholders may want to monitor these ratios closely to assess the company's liquidity position and ability to weather short-term financial challenges.

Additional liquidity measure

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 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 of Avantor Inc has shown some variability over the periods analyzed. On average, the company takes around 70 to 75 days to convert its resources invested in inventory into cash from sales. A shorter cash conversion cycle indicates that the company is efficiently managing its working capital, while a longer cycle may suggest inefficiencies in inventory management or collection of receivables.

From the data provided, we can observe that the cash conversion cycle has ranged from a low of 68.69 days to a high of 79.05 days. The trend appears somewhat fluctuating, with increases and decreases seen in different periods. This variability could be due to seasonality in sales, changes in inventory turnover, or shifts in the company's payment terms with suppliers and customers.

Overall, it is essential for Avantor Inc to monitor and manage its cash conversion cycle effectively to optimize its liquidity and operational efficiency. By streamlining processes related to inventory management, accounts receivable, and accounts payable, the company can potentially reduce the cycle duration and improve its cash flow position.