Azenta Inc (AZTA)

The liquidity ratios of Azenta Inc demonstrate the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown fluctuation over the years, ranging from 2.25 in 2021 to 10.67 in 2022. A higher current ratio indicates a stronger liquidity position.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also varied significantly, with a low of 1.01 in 2021 to a high of 7.52 in 2022. This ratio indicates the company's ability to meet its short-term obligations using its most liquid assets.

The cash ratio, which focuses solely on cash and cash equivalents to cover current liabilities, has also fluctuated over the years. It ranged from 0.66 in 2021 to 6.81 in 2022. A higher cash ratio implies a stronger ability to cover short-term obligations with cash on hand.

Overall, Azenta Inc has generally maintained strong liquidity ratios over the years, with some fluctuations. The company's ability to generate sufficient liquid assets to cover its short-term liabilities indicates a healthy financial position and ability to navigate short-term financial challenges. However, it is essential for the company to monitor these ratios closely to ensure continued liquidity and financial stability.

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Additional liquidity measure

The cash conversion cycle of Azenta Inc has shown fluctuations over the past five years. In 2024, the cash conversion cycle increased to 125.11 days from 127.35 days in 2023. This indicates that the company took slightly less time to convert its investments in inventory and other resources into cash receipts in 2024.

Compared to 2022 when the cash conversion cycle was 50.50 days, the company took longer to convert its working capital into cash in 2024. This may imply potential issues in managing inventory, receivables, and payables during the year.

In 2021, the cash conversion cycle was 98.28 days, reflecting a longer period compared to 2020 when it was 82.46 days. This suggests that in 2021, the company faced challenges in efficiently managing its working capital cycle.

Overall, the fluctuation in the cash conversion cycle over the past five years indicates variability in Azenta Inc's ability to manage its working capital effectively. It will be important for the company to analyze the underlying factors contributing to these fluctuations and implement strategies to optimize its cash conversion cycle moving forward.