Dow Inc (DOW)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.77 | 1.81 | 1.58 | 1.72 | 1.57 |
| Quick ratio | 1.14 | 1.11 | 0.97 | 1.13 | 0.93 |
| Cash ratio | 0.47 | 0.43 | 0.25 | 0.46 | 0.22 |
The liquidity ratios of Dow Inc for the past five years show a consistent trend. The current ratio, which measures the company's ability to meet short-term obligations, remained relatively stable, ranging between 1.57 and 1.81. This indicates that the company has consistently maintained a healthy level of current assets to cover its current liabilities.
The quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, also reflects a consistent trend, ranging between 0.99 and 1.20. This suggests that Dow Inc has maintained a relatively stable ability to meet its short-term obligations with its most liquid assets.
The cash ratio, which provides an even more conservative measure of liquidity by considering only cash and cash equivalents, also remained relatively stable over the five-year period, ranging between 0.29 and 0.54. This indicates that the company has consistently held a sufficient level of cash to cover its short-term liabilities.
Overall, the liquidity ratios of Dow Inc show a consistent and healthy trend, indicating the company's ability to meet its short-term obligations and maintain a strong financial position over the past five years.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 51.95 | 48.10 | 55.21 | 67.93 | 66.80 |
The cash conversion cycle for Dow Inc has seen some fluctuation over the past five years. In 2023, the company's cash conversion cycle was 51.81 days, showing a slight increase from the previous year. This indicates that the company took slightly longer to convert its investments in inventory and other resources into cash during that year.
Comparing to 2021 and 2022, the cash conversion cycle decreased, which suggests an improvement in the efficiency of the company's cash flow management. However, when compared to 2020 and 2019, there was a noticeable reduction in the cash conversion cycle, indicating that the company took less time to convert its investments into cash during these years.
Overall, while there have been fluctuations, it's important to closely monitor the cash conversion cycle as it can provide insight into the company's ability to efficiently manage its working capital and convert assets into cash.