ESAB Corp (ESAB)

ESAB Corp's liquidity ratios have shown consistency over the past five quarters. The current ratio has ranged between 1.61 and 1.73, indicating a healthy ability to cover short-term obligations with current assets. The quick ratio, which excludes inventory from current assets, has also been relatively stable between 0.95 and 1.01, suggesting ESAB Corp has a sufficient level of highly liquid assets to meet short-term liabilities.

Furthermore, the cash ratio, measuring the company's ability to cover current liabilities with cash and cash equivalents, has hovered around 0.33 to 0.35. While this ratio is lower compared to the current and quick ratios, it still shows ESAB Corp holds a reasonable amount of cash to meet its immediate obligations. Overall, ESAB Corp's liquidity ratios demonstrate a consistent and healthy liquidity position, providing a solid foundation for meeting short-term financial commitments.

---

Additional liquidity measure

The cash conversion cycle of ESAB Corp has been fluctuating over the past five quarters. In Q2 2023, the cycle reached its highest point at 79.91 days, indicating that it took the company nearly 80 days to convert its investments in inventory and other resources back into cash. This was followed by a slight improvement in Q4 2023 where the cycle decreased to 68.57 days, showing a more efficient conversion process.

Overall, ESAB Corp experienced some variability in its cash conversion cycle, with Q2 2023 being the least efficient period and Q4 2023 showing signs of improvement. It is crucial for the company to consistently monitor and manage its working capital components to ensure a more streamlined cash conversion process and improve overall financial performance.