Brunswick Corporation (BC)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.43 | 1.81 | 1.47 | 1.55 | 1.62 |
| Quick ratio | 0.56 | 0.78 | 0.59 | 0.86 | 0.70 |
| Cash ratio | 0.27 | 0.41 | 0.25 | 0.54 | 0.35 |
Brunswick Corp.'s liquidity ratios provide insight into the company's ability to meet its short-term financial obligations. The current ratio has decreased from 1.81 in 2022 to 1.43 in 2023, indicating a slight decline in the company's ability to cover its current liabilities with its current assets. The quick ratio follows a similar trend, declining from 0.81 in 2022 to 0.58 in 2023, suggesting a reduced ability to meet short-term obligations without relying on inventory.
The cash ratio also shows a decrease from 0.45 in 2022 to 0.30 in 2023, indicating a lower proportion of cash and cash equivalents available to cover current liabilities. Overall, the declining trend in all three liquidity ratios raises concerns about Brunswick Corp.'s short-term financial position and its ability to handle immediate financial obligations effectively.
These liquidity ratios suggest that Brunswick Corp. may need to improve its cash management and working capital efficiency to enhance its liquidity position and ensure financial stability in the short term. Further analysis and closer monitoring of the company's liquidity metrics are recommended to address potential liquidity challenges and mitigate associated risks.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 88.74 | 80.66 | 68.53 | 57.94 | 82.14 |
The cash conversion cycle for Brunswick Corp. has shown variability over the past five years. In 2023, the cash conversion cycle increased to 100.80 days from 89.77 days in 2022. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during the most recent year.
Compared to 2021 and 2020, where the cash conversion cycle was 75.22 days and 57.94 days respectively, the company's efficiency in managing its working capital deteriorated in 2023. However, the cash conversion cycle in 2023 was lower than that of 2019, where it stood at 82.14 days.
Overall, Brunswick Corp. experienced a longer cash conversion cycle in 2023 compared to the previous year, suggesting potential challenges in efficiently managing its working capital and converting investments into cash. Keeping a close eye on this metric and working towards streamlining the conversion process may help improve the company's financial health and liquidity in the future.