Danaher Corporation (DHR)
Liquidity ratios
| 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 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.68 | 2.26 | 2.08 | 1.89 | 1.89 | 1.78 | 1.75 | 1.68 | 1.43 | 1.48 | 2.26 | 2.05 | 1.86 | 2.08 | 2.20 | 1.32 | 5.19 | 3.43 | 2.32 | 2.18 |
| Quick ratio | 1.18 | 1.76 | 1.52 | 1.34 | 1.30 | 1.19 | 0.53 | 0.49 | 0.89 | 0.35 | 1.07 | 0.93 | 1.39 | 0.94 | 0.99 | 0.52 | 4.06 | 2.45 | 1.13 | 0.89 |
| Cash ratio | 0.71 | 1.31 | 1.02 | 0.85 | 0.71 | 0.64 | 0.53 | 0.49 | 0.32 | 0.35 | 1.07 | 0.93 | 0.84 | 0.94 | 0.99 | 0.52 | 4.06 | 2.45 | 1.13 | 0.89 |
Danaher Corp.'s liquidity ratios provide insights into its ability to meet short-term obligations and efficiently manage its current assets.
1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its current assets. Danaher's current ratio fluctuated during the past quarters, ranging from 1.68 to 2.26. Although the current ratio decreased in Q4 2023 compared to Q3 2023, it remained above 1, indicating that the company has more than sufficient current assets to cover its current liabilities.
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. Danaher's quick ratio ranged from 1.27 to 1.94 over the past quarters. The decrease in Q4 2023 compared to Q3 2023 suggests that the company may have lower short-term liquidity if inventory is excluded from current assets, but it remains at a healthy level overall.
3. Cash Ratio: The cash ratio focuses solely on the company's ability to cover its current liabilities with its cash and cash equivalents. Danaher's cash ratio varied between 0.69 and 1.49 in the past eight quarters. The decline in Q4 2023 compared to Q3 2023 indicates a lower proportion of cash to current liabilities but remains above 1, implying that the company has a strong ability to settle its short-term obligations with available cash.
Overall, Danaher Corp. has maintained satisfactory liquidity ratios over the analyzed period, indicating a solid financial position to meet its short-term obligations and efficiently manage its current assets. However, monitoring these ratios consistently is crucial to ensure continued liquidity and financial stability.
See also:
Danaher Corporation Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 68.82 | 71.09 | 71.25 | 73.04 | 65.06 | 69.30 | 55.55 | 53.21 | 61.34 | 50.83 | 48.45 | 47.74 | 72.31 | 60.62 | 67.62 | 68.02 | 42.02 | 50.91 | 56.98 | 62.70 |
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. By analyzing Danaher Corp.'s cash conversion cycle over the past eight quarters, we observe fluctuations in the efficiency of its working capital management.
In Q4 2023, Danaher Corp.'s cash conversion cycle was 90.59 days, which was higher than the previous quarter's 85.63 days. This increase suggests a potential delay in converting its investments into cash receipts. Comparing Q4 2023 to Q1 2022, where the cycle was 75.09 days, indicates a longer period required to complete the cash conversion process.
The trend over the quarters shows some variability in the cash conversion cycle, with periods of increase and decrease. These fluctuations may be influenced by factors such as changes in sales terms, inventory management, or payment collection practices. Overall, the analysis of Danaher Corp.'s cash conversion cycle highlights the importance of monitoring working capital efficiency to optimize cash flow and liquidity management in the long term.