Avantor Inc (AVTR)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 261,900 | 262,900 | 372,900 | 301,700 | 286,600 |
| Short-term investments | US$ in thousands | — | 16,600 | 26,200 | — | — |
| Receivables | US$ in thousands | 1,034,500 | 1,150,200 | 1,218,400 | 1,222,100 | 1,113,300 |
| Total current liabilities | US$ in thousands | 2,007,500 | 1,480,300 | 1,658,800 | 1,450,800 | 1,242,700 |
| Quick ratio | 0.65 | 0.97 | 0.98 | 1.05 | 1.13 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($261,900K
+ $—K
+ $1,034,500K)
÷ $2,007,500K
= 0.65
The quick ratio of Avantor Inc, a measure of the company's ability to meet its short-term obligations with its most liquid assets, has shown a declining trend over the years. In December 31, 2020, the quick ratio stood at 1.13, indicating that the company had $1.13 in liquid assets for every $1 of current liabilities. However, the ratio decreased to 1.05 by December 31, 2021, and continued to drop to 0.98 in 2022, 0.97 in 2023, and dramatically declined to 0.65 by December 31, 2024.
This downward trend in the quick ratio suggests that Avantor Inc may be facing challenges in maintaining sufficient liquid assets to cover its short-term obligations. A quick ratio below 1.0 may indicate potential liquidity issues, as the company may struggle to meet its current liabilities without relying on selling inventory or obtaining additional financing.
Further analysis and examination of the company's cash management practices, working capital efficiency, and overall liquidity position would be necessary to understand the underlying reasons for the declining quick ratio and to assess the company's overall financial health and stability.
Peer comparison
Dec 31, 2024