Calavo Growers Inc (CVGW)

Calavo Growers, Inc's liquidity ratios have shown fluctuating trends over the past five years. The current ratio, which measures the company's ability to cover short-term liabilities, has exhibited some variability, but generally indicates a healthy level of liquidity. However, it should be noted that the ratio significantly increased in 2023, reflecting improved short-term solvency.

The quick ratio, a more stringent measure of liquidity that excludes inventories from current assets, has also displayed variability during the period. In 2023, the quick ratio improved, indicating a stronger ability to meet short-term obligations without relying on selling inventory.

Furthermore, the cash ratio, which offers insights into the company's ability to cover its current liabilities with cash and cash equivalents, has demonstrated a noticeable improvement in 2023. This indicates a strengthened liquidity position and a reduced reliance on non-cash current assets to meet short-term obligations.

Overall, the liquidity ratios of Calavo Growers, Inc suggest that the company has managed its short-term financial obligations effectively, with a particularly notable improvement in liquidity in the most recent year, which may signal improved financial health and decreased short-term financial risk.

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Additional liquidity measure

The cash conversion cycle is a measure of how efficiently a company manages its working capital in terms of receivables, inventory, and payables. It indicates the number of days it takes for a company to convert its investments in raw materials into cash flows from sales.

Calavo Growers, Inc's cash conversion cycle has shown some variability over the past five years. In 2023, the cash conversion cycle was 33.13 days, which increased from 28.40 days in 2022 and decreased from 42.57 days in 2021. This suggests that the company took slightly longer to convert its investments into cash in 2023 compared to 2022, but showed improvement compared to 2021.

Analyzing the trend over the past five years, we can see that the cash conversion cycle fluctuated, possibly indicating changes in the company's operations, such as inventory management and collection of receivables. Overall, Calavo Growers, Inc's cash conversion cycle has shown some variability, and further analysis of the components affecting the cycle, such as inventory turnover and accounts payable period, would provide more insight into the company's working capital management.