Edwards Lifesciences Corp (EW)

Edwards Lifesciences Corp's liquidity ratios reflect its ability to meet short-term obligations effectively. The current ratio, which measures the company's ability to cover its short-term liabilities with current assets, has shown a decreasing trend from 3.46 in 2020 to 3.03 in 2022, before rising to 4.18 in 2024. This indicates that the company may have slightly less liquidity in 2022 compared to previous years, but has significantly improved its liquidity position by 2024.

The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of liquidity by excluding inventory from current assets. This ratio has followed a similar pattern to the current ratio, with a decline from 1.57 in 2020 to 1.19 in 2022, before increasing to 2.64 in 2024. The decreasing trend in 2022 suggests a potential decrease in the company's ability to meet short-term obligations without relying on inventory, but the substantial improvement in 2024 indicates a stronger liquidity position.

Furthermore, the cash ratio, which specifically focuses on the company's ability to cover short-term liabilities with its cash and cash equivalents, mirrors the trend observed in the quick ratio. With a pattern of decrease in 2022 and a significant increase in 2024, the company's cash ratio aligns with the overall improvement in liquidity over the years.

In conclusion, Edwards Lifesciences Corp has demonstrated a relatively stable liquidity position, with minor fluctuations in the ratios over the years. The significant improvement in liquidity ratios in 2024 indicates a strengthened ability to meet short-term obligations, which may be a positive indicator for investors and creditors.

---

See also:

Edwards Lifesciences Corp Liquidity Ratios

---

Additional liquidity measure

The cash conversion cycle of Edwards Lifesciences Corp has fluctuated over the years, indicating varying efficiency in managing its working capital.

- In December 31, 2020, the company had a cash conversion cycle of 271.00 days, suggesting that it took approximately 271 days to convert its investments in inventory and other resources back into cash. This period could be seen as relatively long, potentially tying up a significant amount of the company's funds in working capital.

- Subsequently, in December 31, 2021, the company's cash conversion cycle improved to 212.38 days, indicating a more efficient utilization of working capital. A lower number of days suggests that the company was able to convert its resources into cash more quickly.

- However, in December 31, 2022, there was a notable increase in the cash conversion cycle to 295.78 days, signifying a potential inefficiency in managing working capital during that period. The increase in days could indicate challenges in converting investments back into cash promptly.

- The trend continued in December 31, 2023, with the cash conversion cycle further lengthening to 309.03 days. This trend suggests a prolonged period for the company to convert investments into cash, potentially impacting its liquidity and overall financial health.

- Lastly, by December 31, 2024, the cash conversion cycle peaked at 354.94 days, indicating a significant challenge in efficiently managing working capital and transforming investments into cash. This prolonged cycle could potentially strain the company's cash flows and operational efficiency.

Overall, the fluctuating cash conversion cycle of Edwards Lifesciences Corp highlights the importance of effectively managing working capital to ensure optimal liquidity and profitability. Continued evaluation and improvement in this area could enhance the company's financial performance and overall stability.