Clean Harbors Inc (CLH)

Clean Harbors, Inc.'s liquidity ratios have shown some fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with short-term assets, has ranged from 1.88 to 2.40 during this period. Generally, a current ratio above 1 indicates that the company has sufficient current assets to cover its current liabilities. Clean Harbors, Inc. has consistently maintained a current ratio above 1, indicating a healthy liquidity position.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Clean Harbors, Inc.'s quick ratio has ranged from 1.61 to 2.05 over the past five years, showing a slightly lower range compared to the current ratio. However, the company has still maintained a quick ratio above 1 in all years, indicating that it has an adequate level of highly liquid assets to cover its short-term obligations.

The cash ratio, which is the most conservative liquidity ratio, measures the company's ability to cover its current liabilities with only cash and cash equivalents. Clean Harbors, Inc.'s cash ratio has fluctuated between 0.61 and 1.00 over the past five years. Although the company's cash ratio has been below 1 in most years, it indicates that Clean Harbors, Inc. may have a lower level of cash compared to its current liabilities.

Overall, Clean Harbors, Inc.'s liquidity ratios demonstrate a consistently healthy liquidity position over the past five years, with the current and quick ratios indicating a strong ability to meet short-term obligations. However, the lower cash ratio in certain years suggests that the company may have relied more on non-cash current assets to cover its short-term liabilities.

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Additional liquidity measure

The cash conversion cycle of Clean Harbors, Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle was 61.51 days, showing an improvement compared to the previous year. This indicates that the company is managing its cash resources more efficiently and converting its inventory and receivables into cash at a quicker pace.

In 2022, the cash conversion cycle was 63.18 days, slightly higher than in 2021 when it was 69.87 days. This suggests that there was a temporary delay in converting inventory and receivables into cash during that period. Notably, in 2020, the cash conversion cycle was relatively high at 81.66 days, indicating a slower turnover of cash resources.

However, in 2019, the cash conversion cycle improved to 62.21 days, showing effective management of cash flow processes. Overall, the trend indicates that Clean Harbors, Inc. has been making efforts to optimize its cash conversion cycle over the years, with fluctuations likely influenced by various operational and economic factors.