Crane Company (CR)

Crane Company's liquidity ratios suggest an improving liquidity position over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, increased significantly from 1.49 in 2020 to 2.58 in 2024, indicating a stronger ability to meet its short-term obligations.

Similarly, the quick ratio, also known as the acid-test ratio, improved from 0.52 in 2020 to 0.56 in 2024. This ratio excludes inventory from current assets to provide a more conservative measure of liquidity, and the upward trend indicates enhanced short-term liquidity adequacy.

The cash ratio, which evaluates the company's ability to cover its current liabilities with its cash and cash equivalents, remained relatively stable over the years at around 0.60. This ratio provides insight into the company's ability to settle immediate obligations solely with its readily available cash resources.

Overall, the liquidity ratios of Crane Company demonstrate a positive trend, with the current and quick ratios showing significant improvement, indicating a stronger liquidity position and better ability to meet short-term obligations efficiently.

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Additional liquidity measure

The cash conversion cycle of Crane Company has exhibited fluctuations over the past five years.

As of December 31, 2020, the company had a cash conversion cycle of 82.69 days, which slightly increased to 83.00 days by December 31, 2021. Subsequently, there was a decrease in the cash conversion cycle to 78.88 days by December 31, 2022, reflecting an improvement in the efficiency of the company's cash management.

However, the trend reversed in the following years, with the cash conversion cycle increasing significantly. By December 31, 2023, the cash conversion cycle reached 100.58 days, indicating that the company took longer to convert its investments in inventory and receivables into cash. This trend continued into December 31, 2024, where the cash conversion cycle further extended to 109.90 days, suggesting potential liquidity challenges or inefficiencies in the company's working capital management.

Overall, the fluctuation in Crane Company's cash conversion cycle highlights the importance of monitoring and managing working capital efficiently to optimize cash flow and liquidity in the business operations.