Bio-Rad Laboratories Inc (BIO)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 5.83 | 5.55 | 2.92 | 3.39 | 2.41 |
| Quick ratio | 4.03 | 4.04 | 1.90 | 2.24 | 1.66 |
| Cash ratio | 3.07 | 3.15 | 1.28 | 1.57 | 1.23 |
Bio-Rad Laboratories Inc. has shown consistent improvement in its liquidity ratios over the past five years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has increased from 2.41 in 2019 to 5.83 in 2023. This indicates that the company has significantly strengthened its liquidity position, as it now has more than enough current assets to cover its short-term liabilities.
Similarly, the quick ratio, a more stringent liquidity measure that excludes inventory from current assets, has also demonstrated a positive trend, increasing from 1.79 in 2019 to 4.33 in 2023. This suggests that Bio-Rad Laboratories Inc. has a strong ability to meet its immediate obligations without relying on selling inventory.
Moreover, the cash ratio, which solely focuses on a company's ability to cover its current liabilities with cash and cash equivalents, has shown a consistent upward trajectory over the years, indicating a robust cash position. The ratio has improved from 1.36 in 2019 to 3.39 in 2023, signaling that Bio-Rad Laboratories Inc. has ample liquid resources to fulfill its short-term obligations.
Overall, the liquidity ratios of Bio-Rad Laboratories Inc. reflect a sound financial position with improving liquidity levels, highlighting the company's ability to manage its short-term financial obligations effectively.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 144.45 | 134.41 | 95.88 | 121.32 | 116.83 |
The cash conversion cycle of Bio-Rad Laboratories Inc. has fluctuated over the past five years. In 2023, the cash conversion cycle increased to 253.35 days from 237.12 days in 2022. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during the year.
In 2021, there was a significant improvement in the cash conversion cycle, decreasing to 175.42 days from 219.21 days in 2020. This suggests that the company efficiently managed its working capital and converted its assets into cash more quickly during that period.
Compared to 2019, the cash conversion cycle in 2023 increased slightly from 216.70 days. This indicates that, overall, Bio-Rad Laboratories Inc. is taking slightly longer to convert its resources into cash compared to five years ago.
Analyzing these trends can help stakeholders assess the company's operational efficiency, working capital management, and potential liquidity challenges.