Danaher Corporation (DHR)

Liquidity ratios

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio 1.40 1.68 1.89 1.43 1.86
Quick ratio 0.31 0.71 0.71 0.32 0.82
Cash ratio 0.31 0.71 0.71 0.32 0.82

Danaher Corporation's current ratio fluctuated over the five-year period, ranging from a low of 1.40 in December 31, 2024, to a high of 1.89 in December 31, 2022. This ratio indicates the company's ability to cover its short-term obligations with its current assets. Generally, a current ratio above 1 signifies that the company is able to meet its short-term liabilities with its current assets.

The quick ratio, which excludes inventory from current assets, also experienced variability, with values as low as 0.31 in December 31, 2024, and a high of 0.82 in December 31, 2020. This ratio provides a more stringent measure of liquidity compared to the current ratio and helps assess a company's ability to meet short-term obligations without relying on inventory sales.

Similarly, the cash ratio, which is the most conservative liquidity measure as it considers only cash and cash equivalents, followed the same trend as the quick ratio, highlighting the company's cash position relative to its current liabilities.

Overall, while Danaher Corporation's liquidity ratios fluctuated over the five-year period, it is essential for investors and stakeholders to closely monitor these ratios to assess the company's ability to meet its short-term obligations effectively.


See also:

Danaher Corporation Liquidity Ratios


Additional liquidity measure

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash conversion cycle days 87.96 77.51 90.65 87.81 85.29

Danaher Corporation's cash conversion cycle has shown some fluctuations over the years. The cycle lengthened from 85.29 days at the end of 2020 to 87.81 days by the end of 2021. Subsequently, it increased further to 90.65 days at the end of 2022. However, there was a notable improvement in 2023 as the cycle decreased to 77.51 days. Despite this improvement, the cycle then expanded again to 87.96 days by the end of 2024.

Overall, the cash conversion cycle for Danaher Corporation has shown variability, with the company taking different amounts of time to convert its investments in inventory into cash flows from sales. This metric is crucial as it reflects the efficiency of Danaher's working capital management and its ability to timely convert inventories into cash receipts. The company may need to focus on optimizing its working capital processes to shorten the cash conversion cycle and improve cash flow efficiency in the future.