Benchmark Electronics Inc (BHE)

Benchmark Electronics Inc. has shown consistent liquidity strength over the past five years based on its liquidity ratios.

The current ratio, which measures the company's ability to pay off its short-term liabilities with its current assets, has been above 2 for the past three years, indicating that Benchmark Electronics Inc. has more than enough current assets to cover its current liabilities. This suggests a healthy liquidity position.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Benchmark Electronics Inc. has maintained a quick ratio above 1 for the same period, showing that the company can cover its short-term obligations with its most liquid assets, excluding inventory.

The cash ratio, which reflects the ability of a company to pay off its current liabilities with only cash and cash equivalents, has been above 1 for three of the past five years. This indicates that Benchmark Electronics Inc. has a solid ability to meet its short-term obligations using its cash reserves alone.

Overall, the liquidity ratios of Benchmark Electronics Inc. suggest that the company has maintained a strong liquidity position in recent years, with sufficient current assets and liquid resources to cover its short-term liabilities. A current ratio consistently above 2 and quick ratio above 1 indicate a healthy liquidity position, although a slight decrease in the cash ratio in some years suggests a slightly reduced ability to cover short-term liabilities solely with cash and cash equivalents.

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Additional liquidity measure

The cash conversion cycle of Benchmark Electronics Inc. has shown variability over the past five years. In 2023, the cash conversion cycle was 102.74 days, slightly lower than the previous year's 104.31 days. This indicates that the company takes approximately 102.74 days to convert its investments in inventory and other resources into cash receipts from customers.

Comparing to 2021 and 2020, the cash conversion cycle has increased significantly from 74.87 days and 63.84 days, respectively. This implies that Benchmark Electronics Inc. took longer to convert its investments into cash during these years, potentially indicating inefficiencies in managing its working capital.

However, looking back to 2019, the company had a cash conversion cycle of 54.50 days, which suggests a more efficient use of its working capital compared to the subsequent years. Overall, monitoring and managing the cash conversion cycle closely can provide insights into the company's operational efficiency and liquidity management.