Catalent Inc (CTLT)
Liquidity ratios
| 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 | Sep 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 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 | 2.06 |
| Quick ratio | 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 | 1.45 |
| Cash ratio | 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 | 0.40 |
Catalent Inc's liquidity ratios have shown fluctuations over the past couple of years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 2.0, indicating a healthy liquidity position. However, there was a notable decrease in the current ratio in the most recent quarter compared to the previous quarters.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also follows a similar trend, with values above 1.0, although it is lower than the current ratio. The quick ratio decreased in the most recent quarter, reflecting a potential decrease in the company's ability to meet its short-term obligations without relying on selling inventory.
The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, shows a significant fluctuation over the periods. In some quarters, the cash ratio was relatively low, suggesting that a significant portion of the company's current assets were tied up in other forms rather than readily available cash.
Overall, while Catalent Inc generally maintains a strong liquidity position based on the current and quick ratios, the fluctuations in these ratios, particularly the decrease in the most recent quarter, signal a need for close monitoring of the company's liquidity management strategies. Additionally, the variation in the cash ratio highlights potential liquidity challenges depending on the composition of the company's current assets.
Additional liquidity measure
| 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 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 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 | 97.34 |
The cash conversion cycle (CCC) measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter CCC indicates better efficiency in managing working capital and generating cash.
Analyzing Catalent Inc's CCC over the provided periods, we observe fluctuations in the efficiency of its working capital management.
From Dec 2019 to Mar 2020, the CCC increased significantly from 97.34 days to 116.99 days, reflecting a deterioration in the company's ability to convert its investments into cash. However, there was a notable improvement in efficiency from Mar 2021 to Jun 2021, with the CCC decreasing to 64.33 days, indicating more effective management of working capital during that period.
Subsequently, the CCC increased again, reaching a peak of 125.77 days in Jun 2023, suggesting a prolonged conversion cycle and potential issues with liquidity or slow inventory turnover. However, there was a positive trend from Jun 2023 to Dec 2024, showing a gradual decline in the CCC, which may indicate improved efficiency in working capital management and faster conversion of resources into cash.
Overall, Catalent Inc's CCC has displayed fluctuations over the periods provided, indicating varying levels of effectiveness in managing working capital and cash flows. It is essential for the company to continuously monitor and improve its cash conversion cycle to ensure optimal liquidity and operational efficiency.