Clean Harbors Inc (CLH)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 2.21 | 1.98 | 1.99 | 1.88 | 2.40 |
| Quick ratio | 1.64 | 1.48 | 1.49 | 1.43 | 1.86 |
| Cash ratio | 0.72 | 0.53 | 0.54 | 0.58 | 0.90 |
Clean Harbors Inc's liquidity ratios indicate a consistent level of liquidity over the years. The current ratio has decreased slightly from 2.40 in 2020 to 1.98 in 2023 but then improved to 2.21 in 2024, showing the company's ability to cover its short-term liabilities with its current assets.
The quick ratio, a more stringent measure of liquidity, has also shown a downward trend from 1.86 in 2020 to 1.48 in 2023 before slightly increasing to 1.64 in 2024. This indicates that the company may have some difficulty meeting its short-term obligations without relying on inventory.
The cash ratio, which measures the company's ability to pay off its current liabilities using only cash and cash equivalents, has shown a similar decline from 0.90 in 2020 to 0.53 in 2023 before improving to 0.72 in 2024. This suggests that Clean Harbors Inc may need to rely more on its other current assets to meet its short-term obligations.
Overall, while Clean Harbors Inc's liquidity ratios have shown some fluctuations, the company has maintained a relatively strong liquidity position over the years, with improvements observed in 2024 across all three ratios.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 56.75 | 56.41 | 57.63 | 63.60 | 74.51 |
The cash conversion cycle of Clean Harbors Inc has shown a positive trend of improvement over the past five years. Beginning at 74.51 days on December 31, 2020, it decreased to 63.60 days by December 31, 2021, indicating a more efficient management of cash flows within the company. This positive trend continued with further reductions to 57.63 days on December 31, 2022, 56.41 days on December 31, 2023, and 56.75 days on December 31, 2024.
The decreasing trend in the cash conversion cycle suggests that the company has been able to convert its investments in inventory and receivables into cash at a faster rate over the years. A lower cash conversion cycle indicates that Clean Harbors Inc is managing its operating cycle more efficiently, thereby freeing up cash for other uses or investments. This improvement in the cash conversion cycle reflects positively on the company's working capital management and overall operational efficiency.