Celanese Corporation (CE)

Based on the provided data, we can analyze the liquidity ratios of Celanese Corporation as follows:

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term liabilities with its current assets.
- From December 31, 2020, to December 31, 2024, Celanese Corporation's current ratio decreased from 1.91 to 1.34.
- While a current ratio above 1 indicates the company has more current assets than current liabilities, a declining trend in the ratio may suggest potential issues meeting short-term obligations.

2. Quick Ratio:
- The quick ratio (also known as acid-test ratio) excludes inventory from current assets to provide a more conservative measure of liquidity.
- Celanese Corporation's quick ratio decreased from 0.75 on December 31, 2020, to 0.25 on December 31, 2024.
- A quick ratio below 1 indicates that the company may have difficulties meeting its short-term obligations without relying on the sale of inventory.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, considering only cash and cash equivalents to cover current liabilities.
- Celanese Corporation's cash ratio remained constant at 0.25 from December 31, 2021, to December 31, 2024.
- A cash ratio of 0.25 implies that for each dollar of liabilities, Celanese Corporation has $0.25 in cash and cash equivalents, which may indicate limited cash reserves to cover short-term obligations.

In summary, the trend of declining current and quick ratios indicates a potential weakening of Celanese Corporation's liquidity position over the years. Further assessment of the company's ability to generate cash and manage its short-term liabilities may be warranted to ensure financial stability.

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Additional liquidity measure

The cash conversion cycle of Celanese Corporation has shown fluctuations over the years based on the provided data.

- As of December 31, 2020, the company had a cash conversion cycle of 81.84 days, indicating that it takes approximately 81 days for Celanese to convert its investments in inventory and other resources back into cash.
- The cycle increased to 95.01 days by December 31, 2021, suggesting a lengthening in the time it takes for the company to recoup its cash outlay from its operational activities.
- By December 31, 2022, the cash conversion cycle rose significantly to 140.53 days, signifying a prolonged period for the company to complete its operating cycle and convert investments into cash.
- The cycle then decreased to 103.19 days by December 31, 2023, showing some improvement in the efficiency of Celanese's working capital management.
- By December 31, 2024, the cash conversion cycle was recorded at 105.21 days, remaining relatively stable compared to the previous year.

Overall, the trend in the cash conversion cycle of Celanese Corporation reflects variability in the company's ability to efficiently manage its working capital and convert investments into cash, with fluctuations over the years indicating changes in operational efficiency and liquidity management.