Celsius Holdings Inc (CELH)

Celsius Holdings Inc's liquidity ratios have displayed fluctuations over the past five years.

The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has generally been healthy and increasing from 2019 to 2022, indicating a strong ability to meet its short-term obligations. However, there was a slight decrease in 2023, which might suggest a potential decrease in liquidity compared to the prior year.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Celsius Holdings Inc's quick ratio has shown fluctuations over the years, with a significant improvement from 2021 to 2022, but then a slight decline in 2023. The company's quick ratio in 2023 indicates that it may be slightly less able to cover its short-term liabilities without relying on inventory compared to the prior year.

The cash ratio, which is the most conservative liquidity ratio, focuses solely on the company's ability to cover its current liabilities with cash and cash equivalents. Celsius Holdings Inc's cash ratio has exhibited a similar pattern to the quick ratio, with notable improvements from 2021 to 2022 before a slight decrease in 2023. The company's cash ratio in 2023 suggests that it has a lower ability to cover its short-term obligations with cash than it did in the previous year.

Overall, Celsius Holdings Inc's liquidity ratios reflect a generally healthy liquidity position, but there are variations in the ability to cover short-term obligations without relying on inventory or other current assets in the most recent year. Monitoring these ratios closely can provide valuable insights into the company's liquidity management and financial health.

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Additional liquidity measure

The cash conversion cycle of Celsius Holdings Inc has exhibited fluctuations over the past five years, indicating changes in the company's efficiency in managing its working capital. In 2023, the cash conversion cycle decreased to 150.23 days from 166.05 days in 2022. This reduction suggests that the company required fewer days to convert its investments in inventory and other resources into cash during the year.

Comparing the data to previous years, it is evident that the cash conversion cycle was notably high in 2021, at 349.78 days, before dropping significantly in 2022 and then again in 2023. This improvement indicates that the company has made strides in streamlining its operations, possibly by better managing its inventory levels or by accelerating its collections from customers.

In 2020 and 2019, the cash conversion cycle was relatively lower at 76.12 days and 80.49 days, respectively, reflecting efficient working capital management during those years. The increase seen in the subsequent years could have been due to various factors such as changes in sales patterns, inventory management practices, or payment terms with suppliers and customers.

Overall, the trend in the cash conversion cycle for Celsius Holdings Inc demonstrates the company's ability to optimize its working capital utilization, albeit with some fluctuations, and indicates a positive direction in terms of efficiency and liquidity management.