Energizer Holdings Inc (ENR)

The liquidity ratios of Energizer Holdings Inc over the past five years indicate the company's ability to meet its short-term obligations and manage its current assets effectively.

Starting with the current ratio, it has shown a fluctuating trend over the years, ranging from 1.34 in 2020 to 2.28 in 2022. In general, the current ratio above 1 indicates that the company has more current assets than current liabilities to cover its short-term obligations. Energizer's current ratio has been generally above 1, with the highest in 2022 at 2.28, showcasing a strong liquidity position.

Moving on to the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, we see similar fluctuations. The quick ratio has ranged from 0.49 in 2020 to 1.04 in 2023, with a notable decrease in 2020 reflecting a lower ability to cover immediate liabilities with liquid assets. However, the quick ratio generally remained above 1, suggesting that Energizer has a sufficient buffer of liquid assets to meet short-term obligations.

Next, the cash ratio, which focuses solely on cash and cash equivalents as a proportion of current liabilities, has also shown variations over the years. The cash ratio ranged from 0.25 in 2021 to 0.30 in 2023, indicating the company's ability to cover a portion of current liabilities with cash on hand.

Overall, the analysis of Energizer Holdings Inc's liquidity ratios reveals a generally sound liquidity position over the years, as indicated by current, quick, and cash ratios consistently above 1. However, the fluctuations suggest varying levels of liquidity management and emphasize the importance of monitoring these ratios to ensure continued ability to meet short-term obligations.

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Additional liquidity measure

The cash conversion cycle for Energizer Holdings Inc has fluctuated over the past five years. In September 2024, the cash conversion cycle was 92.80 days, reflecting the time it takes for the company to convert its investments in inventory and other resources into cash from sales. This improvement from the previous year suggests more efficient management of working capital. However, compared to September 2021 and 2020, the cycle has extended, indicating potential challenges in converting assets into cash. Overall, ongoing monitoring and optimization of the cash conversion cycle will be essential for maximizing liquidity and operational efficiency.