Azenta Inc (AZTA)

The liquidity ratios of Azenta Inc provide an insight into the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to pay its short-term liabilities with its short-term assets, has shown a fluctuating trend over the past five years. It has decreased from 10.67 in 2022 to 6.73 in 2023, indicating a reduction in the company's short-term liquidity position. However, the current ratio remains at a healthy level, suggesting that Azenta Inc has a strong ability to cover its short-term debts with its current assets.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also exhibits a declining trend, albeit at a slightly more dramatic pace. It decreased from 8.64 in 2022 to 6.10 in 2023. This may indicate a decrease in the company's ability to cover its short-term obligations with its most liquid assets.

The cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has also shown a downward trend, decreasing from 7.93 in 2022 to 5.36 in 2023. While the cash ratio remains at a relatively strong level, the consistent decrease may warrant further investigation into the company's cash management practices.

Overall, while Azenta Inc's liquidity ratios remain at healthy levels, the declining trend observed in the current, quick, and cash ratios over the past few years may indicate a potential reduction in the company's short-term liquidity position. It is essential for stakeholders to closely monitor the company's liquidity management and explore the underlying reasons for these trends to ensure the company's ability to meet its short-term obligations.

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Additional liquidity measure

The cash conversion cycle of Azenta Inc has shown a fluctuating trend over the past five years. In 2023, the cash conversion cycle increased to 169.82 days from 164.67 days in 2022. This prolonged cycle indicates that Azenta is taking longer to convert its resources into cash. Comparing this to 2021 and 2020, the cycle significantly rose from 109.57 days and 114.05 days, respectively. This may suggest inefficiencies in managing its cash and working capital. However, it is noteworthy that the cycle in 2023 is still lower than in 2019 when it was 109.25 days. Overall, Azenta Inc needs to closely monitor its working capital management to optimize its cash conversion cycle and enhance its liquidity position.