Edgewell Personal Care Co (EPC)

The liquidity ratios of Edgewell Personal Care Co show varying levels of short-term financial health over the past five years.

The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has fluctuated between 1.66 and 2.12 over the period. A current ratio above 1 indicates that the company has more current assets than current liabilities, which is generally favorable. However, a decreasing trend in the current ratio may imply a potential liquidity risk in meeting short-term obligations.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. The trend in the quick ratio for Edgewell Personal Care Co has been declining, ranging from 0.66 to 1.26. A quick ratio below 1 indicates potential difficulty in meeting short-term obligations without relying on inventory sales. The decreasing trend in the quick ratio warrants further investigation into the company's ability to convert current assets into cash quickly.

The cash ratio, which is the most conservative liquidity ratio, measures the company's ability to cover short-term obligations with its cash and cash equivalents. Edgewell Personal Care Co's cash ratio has also been decreasing, falling from 0.37 to 0.71. A cash ratio below 1 may signal a lower liquidity position and a potential inability to meet short-term obligations solely with cash on hand.

Overall, the liquidity ratios of Edgewell Personal Care Co suggest a mixed picture of short-term financial health. While the current ratio indicates a generally healthy ability to cover short-term obligations with current assets, the decreasing trends in the quick ratio and cash ratio raise concerns about the company's liquidity position. Further analysis and monitoring of these ratios are recommended to assess the company's liquidity risk and financial stability.

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Additional liquidity measure

The cash conversion cycle of Edgewell Personal Care Co has shown fluctuations over the past five years. In the most recent period ending September 30, 2024, the company's cash conversion cycle was 99.13 days, which represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

Comparing this with the previous years, we observe that the cash conversion cycle has improved from 110.34 days in 2023 to 99.13 days in 2024. This indicates that the company has become more efficient in managing its working capital and converting its resources into cash.

However, when looking further back, there was a spike in the cash conversion cycle in 2023 compared to 2022, where it was 92.16 days. This suggests that the company faced challenges in managing its working capital efficiently in that particular period.

Overall, the trend of the cash conversion cycle for Edgewell Personal Care Co shows some volatility but has generally improved from 2022 to 2024, indicating better management of liquidity and working capital over time.