Corteva Inc (CTVA)

Based on the provided data, we can analyze Corteva Inc's liquidity ratios over the years:

1. Current Ratio:
- The current ratio measures Corteva's ability to cover its short-term obligations with its current assets.
- Corteva's current ratio has shown a slight decline from 1.73 in 2020 to 1.45 in 2024.
- A current ratio above 1 indicates that Corteva has more current assets than current liabilities, which is generally considered favorable.
- However, the decreasing trend in the current ratio over the years may signal a potential decrease in Corteva's short-term liquidity position.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of Corteva's liquidity as it excludes inventory from current assets.
- Corteva's quick ratio has fluctuated between 0.26 and 0.48 over the period.
- A quick ratio below 1 suggests that Corteva may have difficulty meeting its short-term liabilities without relying on selling inventory.
- The lower quick ratio in 2023 indicates a potential decrease in Corteva's ability to quickly cover its short-term obligations.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, measuring Corteva's ability to cover its current liabilities with its cash and cash equivalents alone.
- Corteva's cash ratio has also fluctuated between 0.26 and 0.48 during the period.
- A cash ratio below 1 suggests that Corteva may need to rely on sources other than cash to meet its short-term obligations.
- The stability in the cash ratio, with minor fluctuations, indicates that Corteva has maintained a relatively stable cash position over the years.

In conclusion, while Corteva Inc's liquidity ratios generally show a favorable position, the decreasing trend in the current ratio and the fluctuating quick ratio highlight the importance of monitoring Corteva's liquidity management to ensure its ability to meet short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Corteva Inc has fluctuated over the past five years, indicating variation in its operational efficiency in managing cash flow. In 2020, the company took an average of 209.47 days to convert its investments in inventory into cash receipts from customers. By the end of 2021, this cycle improved slightly to 205.07 days, suggesting more efficient management. However, in 2022 and 2023, the cycle extended to 238.22 days and 250.21 days, respectively, reflecting a potential slowdown in converting inventory into cash.

Interestingly, by the end of 2024, there was a significant improvement in the cash conversion cycle to 208.07 days, which indicated a more streamlined process in converting inventory investments into cash receipts. Overall, Corteva Inc should focus on maintaining and continuing to improve its cash conversion cycle to ensure efficient operations and maximize cash flow management.