Carlisle Companies Incorporated (CSL)

The liquidity ratios of Carlisle Companies Inc. provide insights into its ability to meet short-term financial obligations.

1. Current Ratio: This ratio indicates the company's ability to pay off its short-term liabilities with its current assets. Carlisle's current ratio has shown a fluctuating trend over the past five years, ranging from 1.84 to 3.42. The current ratio was strongest in 2020 and 2023, indicating that the company had more than enough current assets to cover its current liabilities. However, the ratio dipped in 2021 and 2022, suggesting a potential strain on liquidity during those years.

2. Quick Ratio: The quick ratio measures the company's ability to meet short-term obligations using its most liquid assets (cash, cash equivalents, and accounts receivable). Carlisle's quick ratio has also varied over the years, with values ranging from 1.11 to 2.64. The higher quick ratios in 2020 and 2023 indicate a strong ability to cover short-term liabilities without relying on inventory liquidation. Conversely, the lower quick ratios in 2021 and 2022 imply a lower level of liquidity without sufficient quick assets.

3. Cash Ratio: The cash ratio is the most stringent measure of liquidity, focusing solely on the company's ability to cover short-term obligations using its cash and cash equivalents. Carlisle's cash ratio has fluctuated between 0.51 and 1.69 over the past five years. The higher cash ratio in 2020 and 2023 suggests a relatively higher proportion of cash available to cover liabilities, highlighting a stronger liquidity position in those years.

Overall, while Carlisle Companies Inc. generally maintains acceptable liquidity levels based on these ratios, there have been fluctuations over the years that may indicate changing liquidity risks and the need for careful monitoring and management of short-term liquid assets.

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Additional liquidity measure

The cash conversion cycle for Carlisle Companies Inc. has fluctuated over the past five years. In 2023, the company was able to convert its inventory and accounts receivable into cash more efficiently compared to the previous year, as indicated by a decrease in the cycle to 63.33 days from 77.05 days in 2022. This improvement suggests that the company managed its working capital more effectively, possibly by reducing its inventory levels or collecting receivables faster.

Looking at the trend since 2019, there has been a general reduction in the cash conversion cycle, indicating that Carlisle Companies Inc. has become more efficient in managing its operations and cash flow. In 2021, the cycle reached its lowest point at 79.84 days but increased slightly in 2022 before decreasing again in 2023.

Overall, the decreasing trend in the cash conversion cycle is a positive sign for Carlisle Companies Inc. It suggests that the company has been able to streamline its operations and improve the efficiency of its working capital management over the years. Maintaining this trend could lead to better cash flow generation and overall financial performance in the future.