Clearwater Paper Corporation (CLW)

Clearwater Paper Corp's liquidity ratios indicate the company's ability to meet its short-term obligations.

- The current ratio has shown a consistent improvement over the past five years, reaching 1.97 in 2023. This ratio suggests that Clearwater Paper Corp has $1.97 in current assets for every $1 in current liabilities, indicating a healthy liquidity position.

- The quick ratio, which measures the company's ability to cover its short-term liabilities with its most liquid assets, has also shown improvement over the years, reaching 0.85 in 2023. This indicates that Clearwater Paper Corp has $0.85 in highly liquid assets available to cover each dollar of current liabilities.

- The cash ratio, which is the most conservative liquidity ratio, has fluctuated over the years but remained at 0.21 in 2023. This ratio indicates that Clearwater Paper Corp has $0.21 in cash and cash equivalents to cover each dollar of current liabilities.

Overall, Clearwater Paper Corp's liquidity ratios have generally improved over the years, indicating a strong ability to meet its short-term obligations. The current and quick ratios are above 1, signaling a healthy liquidity position, while the cash ratio provides additional insight into the company's ability to cover immediate liabilities with its cash reserves.

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Additional liquidity measure

The cash conversion cycle of Clearwater Paper Corp has fluctuated over the past five years, ranging from 55.35 days to 64.78 days. The company's ability to convert its resources efficiently into cash has shown some variability. In 2023, the cash conversion cycle increased to 64.78 days from 55.35 days in 2022, indicating a potential delay in converting its investments into cash. This may signal inefficiencies in managing the company's working capital and operating cycle. However, compared to 2019, where the cash conversion cycle was 63.15 days, there has been some improvement.

Despite the slight increase in 2023, the company should continue monitoring and improving its cash conversion cycle to optimize its working capital management and enhance overall liquidity. This metric serves as a key indicator of the company's operational efficiency and effectiveness in managing its cash flows.