Carlisle Companies Incorporated (CSL)

Based on the provided data for Carlisle Companies Incorporated, we can observe the following trends in the liquidity ratios:

1. Current Ratio:
- The current ratio measures the ability of a company to meet its short-term obligations with its current assets.
- In 2020, the company had a robust current ratio of 3.42, indicating a strong liquidity position.
- However, there was a significant decline in the current ratio in 2021 to 1.84, suggesting a potential strain in meeting short-term obligations.
- The ratio improved in 2022 and 2023 to 2.08 and 2.87 respectively, indicating an enhancement in liquidity.
- By the end of 2024, the current ratio stood at 2.89, reflecting a slight increase compared to the previous year and a healthy liquidity position.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of liquidity by excluding inventory from current assets.
- In 2020, the quick ratio was 1.39, indicating a good ability to meet short-term obligations without relying heavily on inventory.
- However, there was a sharp decline in the quick ratio in 2021 to 0.28, suggesting a potential strain in liquidity without the support of inventory.
- The ratio gradually improved in 2022 and 2023 to 0.37 and 0.49 respectively, signaling a better liquidity position.
- By the end of 2024, the quick ratio significantly increased to 1.13, indicating a substantial improvement in liquidity and a stronger ability to cover short-term liabilities.

3. Cash Ratio:
- The cash ratio is the most conservative measure of liquidity, focusing solely on cash and cash equivalents to cover short-term obligations.
- The cash ratio for Carlisle Companies Incorporated mirrored the trends observed in the quick ratio, with values of 1.39 in 2020 and a significant increase to 1.13 by the end of 2024.
- This indicates that the company maintained a healthy level of cash reserves relative to its short-term liabilities, showing an improvement in liquidity over the years.

In summary, while there were fluctuations in liquidity ratios over the years, Carlisle Companies Incorporated generally exhibited a strong liquidity position, with improvements seen in the latter years, particularly in 2024.

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Additional liquidity measure

The cash conversion cycle of Carlisle Companies Incorporated has shown some variability over the past five years.

As of December 31, 2020, the company's cash conversion cycle was 55.76 days, indicating that it took on average 55.76 days for the company to convert its investments in inventory and accounts receivable into cash receipts from customers.

By December 31, 2021, this cycle had increased to 63.18 days, suggesting a longer period for the company to collect cash from its operating cycle activities.

In the following years, the trend fluctuates slightly, with the cycle coming down to 61.63 days by December 31, 2022, and then improving significantly to 43.39 days by December 31, 2023.

However, by the end of December 31, 2024, the cash conversion cycle increased again to 55.37 days, albeit remaining below the levels seen in 2021 and 2020.

This analysis highlights the importance of managing inventory and accounts receivable effectively to optimize cash flow and working capital efficiency for Carlisle Companies Incorporated.