Ecolab Inc (ECL)

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 1.30 1.26 1.22 1.17 1.30 1.35 1.29 1.27 1.32 1.72 1.91 1.81 1.75 1.61 1.60 1.51 1.33 1.24 1.18 1.14
Quick ratio 0.91 0.87 0.79 0.73 0.83 0.79 0.78 0.76 0.84 1.19 1.35 1.28 1.26 1.14 1.16 1.10 0.86 0.77 0.72 0.70
Cash ratio 0.21 0.22 0.12 0.09 0.14 0.03 0.03 0.03 0.10 0.31 0.49 0.42 0.43 0.33 0.42 0.39 0.05 0.03 0.02 0.02

Ecolab, Inc.'s liquidity ratios have shown some fluctuations over the past eight quarters. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has ranged from 1.17 to 1.35 during this period. While the current ratio generally remained above 1, indicating that Ecolab had sufficient current assets to cover its current liabilities, there was a slight downward trend from Q1 2023 to Q4 2023.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, ranged from 0.79 to 0.95. This ratio was consistently lower than the current ratio, suggesting that inventory could potentially not be as easily converted into cash if needed to meet immediate obligations. Similar to the current ratio, the quick ratio experienced a slight decline over the quarters.

The cash ratio, which is the most conservative liquidity metric and focuses solely on cash and cash equivalents, ranged from 0.09 to 0.27. Ecolab's cash ratio showed some volatility, with the highest value recorded in Q3 2023 and the lowest in Q2 2022. The decreasing trend from Q2 2023 to Q1 2022 indicates a potential decrease in the company's ability to cover its current liabilities with cash alone.

In summary, Ecolab, Inc.'s liquidity ratios suggest that while the company generally maintained an adequate level of liquidity to meet its short-term obligations, there were some fluctuations and downward trends in the quick and cash ratios that warrant further monitoring to ensure continued financial stability.

See also:

Ecolab Inc 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 69.50 73.58 78.05 78.87 75.14 81.24 81.36 78.54 78.17 78.63 81.89 84.53 76.31 75.42 66.67 80.54 72.22 80.01 81.36 82.20

The cash conversion cycle of Ecolab, Inc. has shown fluctuations over the past eight quarters. The cycle measures the efficiency of the company's working capital management by evaluating the period it takes to convert resources invested in inventory and accounts receivable into cash flow from sales.

In Q4 2023, the cash conversion cycle decreased to 69.22 days from 74.67 days in Q3 2023, indicating a more efficient management of working capital. However, the cycle increased in the previous quarters, peaking at 82.85 days in Q1 2023. This suggests a potential lag in converting inventory and receivables into cash during that period.

Comparing Q4 2023 to the same period in the previous year, the cycle has shown improvement as it was 76.82 days in Q4 2022. This indicates that Ecolab, Inc. has made progress in enhancing its working capital efficiency over the year.

Overall, tracking the cash conversion cycle provides insights into the company's operational efficiency and liquidity management. Ecolab, Inc. should continue monitoring and managing its working capital effectively to ensure optimal cash flow and financial performance.