Crane NXT Co (CXT)

Crane NXT Co's liquidity ratios show fluctuations over the years.

1. Current Ratio:
- The current ratio measures the company's ability to meet short-term obligations with its current assets.
- In 2020, the current ratio was 1.49, indicating the company had $1.49 in current assets for every dollar of current liabilities.
- The ratio improved in 2021 to 1.96, suggesting stronger liquidity position.
- However, in 2022, the current ratio decreased to 1.18, indicating a potential strain on short-term liquidity.
- By 2024, the ratio increased to 1.14, showing some improvement from 2022 but still below the 2021 level.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets.
- In 2020, the quick ratio was 0.52, suggesting a lower ability to cover immediate liabilities without relying on inventory.
- The ratio increased slightly in 2021 to 0.61 but declined in 2022 to 0.44, indicating a potential liquidity challenge.
- By 2024, the quick ratio further decreased to 0.29, signaling a more significant liquidity risk.

3. Cash Ratio:
- The cash ratio focuses solely on the company's ability to cover short-term liabilities with cash and cash equivalents.
- The cash ratio mirrored the quick ratio trends, with values of 0.52 in 2020 and 2021, and a decline to 0.44 in 2022.
- In 2023, the cash ratio improved to 0.68, suggesting a healthier cash position, before decreasing to 0.29 in 2024, indicating a potential liquidity strain.

Overall, while Crane NXT Co experienced fluctuations in its liquidity ratios over the years, the downward trends in the quick ratio and cash ratio in 2024 may raise concerns about the company's ability to meet its short-term obligations with its current assets, particularly cash and equivalents.

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Additional liquidity measure

Crane NXT Co's cash conversion cycle has shown a decreasing trend over the years, indicating an improvement in efficiency in managing its working capital. The company took 82.84 days to convert its resources into cash at the end of 2020, which decreased to 64.32 days by the end of 2024. This downward trend suggests that Crane NXT Co has been able to streamline its operations effectively, potentially by reducing the time it takes to sell inventory, collect receivables, and pay its suppliers. A lower cash conversion cycle is generally viewed positively as it signifies better liquidity and financial performance. Overall, the decreasing trend in Crane NXT Co's cash conversion cycle indicates enhanced efficiency in managing its cash flow and working capital over the analyzed period.