Bruker Corporation (BRKR)

Bruker Corp's liquidity ratios have shown a declining trend over the past five years. The current ratio, which measures the firm's ability to cover short-term liabilities with current assets, decreased from 2.78 in 2019 to 1.80 in 2023. This implies that the company may have less liquidity to meet its short-term obligations compared to previous years.

Similarly, the quick ratio, also known as the acid-test ratio, decreased from 1.89 in 2019 to 0.99 in 2023. This suggests that Bruker Corp may have a lower ability to cover its current liabilities with its most liquid assets, excluding inventory. A declining quick ratio could indicate potential difficulties in meeting short-term obligations without relying on selling inventory.

Furthermore, the cash ratio, which measures the proportion of current liabilities that can be covered by cash and cash equivalents, also decreased over the years, from 1.33 in 2019 to 0.59 in 2023. This downward trend may indicate that the company's cash position relative to its current liabilities has weakened over time.

Overall, the declining trend in Bruker Corp's liquidity ratios raises concerns about its ability to meet short-term financial obligations efficiently. The company may need to closely monitor its liquidity position and implement strategies to improve its liquidity management to ensure financial stability and operational continuity.

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Additional liquidity measure

The cash conversion cycle of Bruker Corp has shown fluctuation over the past five years, ranging from 219.23 days in 2019 to 255.87 days in 2020. The cycle measures the amount of time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A longer cash conversion cycle generally indicates inefficiency in managing working capital, potentially leading to higher financing costs or liquidity challenges. In this case, Bruker Corp's cash conversion cycle has remained relatively stable in recent years, with a slight increase in 2023 compared to 2022. This suggests that the company may need to focus on optimizing inventory management and accounts receivable turnover to improve operational efficiency and cash flow generation.