Charles River Laboratories (CRL)

Based on the provided data, Charles River Laboratories' liquidity ratios have shown some fluctuations over the years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, decreased from 1.43 in 2020 to 1.23 in 2021, but then improved to 1.52 in 2023 before settling at 1.41 in 2024. This indicates that the company has generally been able to meet its short-term obligations, although the slight dip in 2021 may have raised concerns.

The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, followed a similar pattern. It declined from 1.01 in 2020 to 0.86 in 2021, but then increased to 1.00 in 2023, ending at 0.92 in 2024. This suggests that the company may have faced some challenges in the short term in 2021, but managed to strengthen its liquidity position in the following years.

The cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) compared to current liabilities, also exhibited fluctuations. It dropped from 0.27 in 2020 to 0.23 in 2021, improved slightly in 2023 to 0.26, and then decreased to 0.20 in 2024. This ratio indicates the company's ability to cover its immediate liabilities with its most liquid assets, and the downward trend in 2024 may warrant further investigation.

Overall, despite some ups and downs, Charles River Laboratories has maintained reasonable liquidity levels over the years as indicated by its current, quick, and cash ratios. It is essential for the company to continue monitoring and managing its liquidity effectively to ensure it can meet its financial obligations in a timely manner.

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Additional liquidity measure

Charles River Laboratories' cash conversion cycle shows a fluctuating trend over the past five years. In 2020, the company's cash conversion cycle was 111.52 days, indicating a relatively long period of time required to convert its investments in inventory back into cash.

By the end of 2021, the cash conversion cycle improved significantly to 69.15 days, suggesting more efficiency in managing inventory, accounts receivable, and accounts payable. However, by the end of 2022, the cycle increased to 89.03 days, indicating a slight slowdown in the conversion of investments into cash.

The trend reversed in 2023 as the cash conversion cycle markedly increased to 149.91 days, signaling potential challenges in managing working capital efficiently. In 2024, the cycle decreased to 102.18 days, but it remained higher than the levels seen in 2021 and 2022.

Overall, Charles River Laboratories has shown fluctuations in its cash conversion cycle over the past five years, with improvements in 2021 followed by challenges in 2023. It is important for the company to continue monitoring and managing its working capital effectively to ensure optimal cash flow and operational efficiency.