Enovis Corp (ENOV)

Enovis Corp's liquidity ratios have shown varying trends over the past five years. The current ratio, which measures the company's ability to cover short-term obligations with current assets, has fluctuated between 1.41 and 2.43. A ratio above 1 indicates that the company can meet its current liabilities with its current assets. The increasing current ratio from 2020 to 2023 suggests that Enovis Corp has improved its liquidity position over the years.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Enovis Corp's quick ratio has ranged from 0.65 to 1.49. A quick ratio above 1 indicates that the company can meet its short-term obligations without relying on inventory sales. The increasing trend in the quick ratio over the years indicates an improvement in Enovis Corp's ability to meet its immediate financial commitments.

The cash ratio, which is the most conservative liquidity measure as it only includes cash and cash equivalents in the numerator, has varied between 0.18 and 0.87 for Enovis Corp. A higher cash ratio signifies a stronger ability to cover short-term liabilities with cash on hand. The fluctuations in the cash ratio suggest that Enovis Corp's cash position has not been as stable compared to its current and quick ratios.

Overall, Enovis Corp's liquidity ratios indicate an improving trend in the company's ability to meet its short-term obligations. However, the fluctuating values of the ratios highlight the importance of consistent monitoring of liquidity metrics to ensure financial stability.

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Additional liquidity measure

The cash conversion cycle for Enovis Corp has shown some fluctuations over the past five years. In 2023, the cash conversion cycle increased to 233.69 days from 215.55 days in 2022. This implies that the company took longer to convert its investments in inventory and accounts receivable into cash during 2023.

Comparing the most recent data to earlier years, there has been a significant increase in the cash conversion cycle from 2021 to 2023. This suggests that Enovis Corp may have experienced challenges in managing its working capital efficiency in 2023.

In contrast, there was a notable decline in the cash conversion cycle in 2021 compared to 2020, indicating that the company improved its efficiency in converting investments into cash that year. However, this improvement was not sustained in subsequent years.

Overall, the trend in the cash conversion cycle for Enovis Corp has been somewhat mixed, with fluctuations observed from year to year. It is essential for the company to closely monitor and manage its working capital components to ensure optimal cash flow management and profitability in the future.