Edwards Lifesciences Corp (EW)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 3.38 | 3.03 | 3.08 | 3.46 | 3.31 |
| Quick ratio | 2.02 | 1.82 | 1.98 | 2.14 | 2.28 |
| Cash ratio | 1.38 | 1.19 | 1.42 | 1.57 | 1.68 |
The liquidity ratios of Edwards Lifesciences Corp over the past five years indicate the company's ability to meet its short-term obligations.
1. Current Ratio:
The current ratio shows a fluctuating trend over the period, varying between 3.03 and 3.46. In general, the current ratio has been consistently above 3, indicating that the company had more than enough current assets to cover its current liabilities. A higher current ratio is typically viewed as positive, suggesting strong liquidity and financial health.
2. Quick Ratio:
Similarly, the quick ratio has also displayed fluctuations but has generally remained above 2, ranging from 2.17 to 2.60. This indicates that Edwards Lifesciences Corp had a sufficient level of highly liquid assets to cover its current liabilities without relying on inventory. A quick ratio above 1 is considered healthy and implies good short-term liquidity.
3. Cash Ratio:
The cash ratio has shown a decreasing trend over the years, declining from 1.93 in 2019 to 1.70 in 2023. This suggests that the company had a decreasing ability to cover its short-term liabilities solely with its cash holdings. A cash ratio above 1 indicates that the company can settle its current liabilities with the available cash on hand.
Overall, based on these liquidity ratios, Edwards Lifesciences Corp has demonstrated a consistently strong liquidity position, with current, quick, and cash ratios consistently above commonly accepted benchmarks. The company appears to have a solid ability to meet its short-term obligations and maintain financial stability.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 157.13 | 134.57 | 110.01 | 138.38 | 116.97 |
The cash conversion cycle of Edwards Lifesciences Corp has exhibited varying trends over the past five years. In 2023, the company's cash conversion cycle increased to 306.62 days from 274.98 days in 2022, indicating a lengthening of the time it takes for the company to convert its investments in inventory and accounts receivable into cash. This may suggest potential inefficiencies in managing inventory or collecting receivables.
Comparing 2023 to 2021, there was a notable increase in the cash conversion cycle from 199.00 days to 306.62 days, reflecting a significant deterioration in the company's cash conversion efficiency. This suggests that Edwards Lifesciences Corp may be facing challenges in optimizing its working capital management processes.
In 2020, the cash conversion cycle was 254.79 days, showing an improvement compared to 2019 when it stood at 201.12 days. This improvement in 2020 may indicate enhanced working capital management efficiency during that period.
Overall, fluctuations in the cash conversion cycle of Edwards Lifesciences Corp over the past five years suggest varying levels of effectiveness in managing the company's liquidity and working capital. Monitoring and analyzing these trends can provide valuable insights into the company's operational efficiency and financial health.