Chemours Co (CC)

The liquidity ratios of Chemours Co, namely the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term obligations with its current assets.

The current ratio has decreased from 1.80 in 2021 to 1.54 in 2023. This suggests that the company may have a slightly lower ability to cover its short-term obligations with its current assets. However, the current ratio still indicates that Chemours Co has sufficient current assets to cover its current liabilities.

The quick ratio has also shown a decreasing trend from 1.17 in 2021 to 0.73 in 2023. This indicates that the company's ability to quickly cover its short-term obligations with its most liquid assets has decreased. A quick ratio below 1.0 may raise concerns about the company's liquidity position.

The cash ratio has fluctuated over the years, reaching 0.48 in 2023. This ratio indicates that Chemours Co may have a relatively lower ability to cover its short-term liabilities with its cash and cash equivalents alone. A decreasing cash ratio could signify potential challenges in meeting immediate payment obligations.

Overall, while the current ratio suggests that Chemours Co still has a comfortable margin to cover its short-term obligations, the declining trend in the quick and cash ratios may indicate a potential deterioration in the company's liquidity position over the past years. Further analysis of the company's cash management practices and working capital management may be warranted to assess its ability to meet its short-term financial commitments effectively.

---

Additional liquidity measure

The cash conversion cycle of Chemours Co has shown some fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 49.61 days from 44.51 days in 2022. This indicates that it took the company longer to convert its investments in inventory and accounts receivable into cash in 2023 compared to the previous year.

Looking further back, the trend shows improvement from 2019 to 2021, where the cash conversion cycle decreased from 56.68 days in 2019 to 39.03 days in 2021. This suggests that the company became more efficient in managing its working capital during this period by reducing the time it takes to sell inventory and collect payments from customers.

However, the increase in the cash conversion cycle in 2023 may raise concerns about the company's liquidity and operational efficiency. It is important for Chemours Co to analyze the reasons behind this increase and take appropriate actions to optimize its working capital management to ensure a healthy cash conversion cycle in the future.