Catalent Inc (CTLT)
Liquidity ratios
Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | |
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Current ratio | 2.51 | 2.52 | 2.51 | 2.48 | 1.70 | 1.76 | 1.84 | 1.88 | 2.79 | 2.66 | 2.89 | 2.85 | 3.59 | 2.44 | 2.44 | 2.46 | 2.56 | 2.57 | 1.90 | 1.98 |
Quick ratio | 1.10 | 1.17 | 1.03 | 1.03 | 0.68 | 0.84 | 0.93 | 0.89 | 1.38 | 1.45 | 1.73 | 1.71 | 2.60 | 1.65 | 1.67 | 1.57 | 1.86 | 2.01 | 1.43 | 1.32 |
Cash ratio | 0.34 | 0.28 | 0.16 | 0.22 | 0.14 | 0.18 | 0.23 | 0.30 | 0.36 | 0.49 | 0.84 | 0.88 | 1.84 | 0.81 | 0.93 | 0.81 | 1.09 | 1.07 | 0.66 | 0.29 |
Catalent Inc's liquidity ratios have shown fluctuations over the past few quarters. The current ratio, which measures the company's ability to cover its short-term obligations with current assets, has generally been above 2, indicating a strong liquidity position. However, there was a significant decrease in the current ratio from Q2 2023 to Q3 2023, before recovering and maintaining levels above 2 in subsequent quarters.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also reflects a healthy liquidity position for Catalent Inc. Similar to the current ratio, there were fluctuations in the quick ratio over the quarters, but it has generally been above 1, showing the company's ability to meet short-term obligations without relying on inventory sales.
The cash ratio, which is the most conservative liquidity measure as it focuses solely on cash and cash equivalents, demonstrates a more volatile trend for Catalent Inc. While the cash ratio showed values above 1 in some quarters, indicating a strong ability to cover short-term liabilities with cash, there were quarters where the ratio dropped significantly. This may suggest fluctuations in the company's cash position and its ability to meet immediate obligations solely with cash on hand.
Overall, Catalent Inc's liquidity ratios point towards a generally sound liquidity position, with the current and quick ratios indicating the ability to cover short-term obligations comfortably. However, the fluctuating trend in the cash ratio highlights the importance of monitoring the company's cash position closely to ensure continued liquidity strength.
Additional liquidity measure
Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
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Cash conversion cycle | days | 81.53 | 99.41 | 116.99 | 115.02 | 119.59 | 125.77 | 125.00 | 122.10 | 114.85 | 112.06 | 104.59 | 111.14 | 106.99 | 116.95 | 64.33 | 58.67 | 51.77 | 58.63 | 92.68 | 92.29 |
The cash conversion cycle of Catalent Inc has exhibited fluctuations over the past few years. It is a metric that reflects the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
The trend in Catalent Inc's cash conversion cycle indicates that the company took shorter periods to convert its investments into cash in the earlier years, with a notable decline in the cycle duration in the first half of 2021. However, there was a subsequent increase in the cycle duration in the second half of 2021 and into 2022, reaching its peak at around 125 days in mid-2023.
From mid-2023 to 2024, there has been a gradual improvement in the cash conversion cycle, with the duration declining from around 125 days to 81.53 days in September 2024. This may signify enhanced efficiency in managing the company's inventory, accounts receivable, and accounts payable.
Overall, a lower cash conversion cycle indicates that Catalent Inc is managing its working capital more effectively, thereby improving its liquidity position. It is essential for the company to continue monitoring and optimizing its cash conversion cycle to ensure operational efficiency and sustainable growth.