Edwards Lifesciences Corp (EW)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.38 | 3.28 | 3.15 | 3.01 | 3.03 | 3.83 | 3.37 | 3.41 | 3.08 | 3.64 | 3.75 | 3.84 | 3.46 | 3.52 | 3.08 | 3.36 | 3.31 | 3.53 | 3.38 | 3.66 |
| Quick ratio | 2.02 | 2.10 | 1.96 | 1.82 | 1.82 | 2.57 | 2.22 | 2.24 | 1.98 | 2.48 | 2.48 | 2.40 | 2.14 | 2.18 | 1.32 | 1.37 | 2.28 | 1.74 | 1.33 | 1.48 |
| Cash ratio | 1.38 | 1.50 | 1.30 | 1.16 | 1.19 | 1.89 | 1.56 | 1.57 | 1.42 | 1.86 | 1.76 | 1.67 | 1.57 | 1.53 | 1.33 | 1.38 | 1.68 | 1.75 | 1.34 | 1.49 |
The liquidity ratios of Edwards Lifesciences Corp, as evidenced by the current ratio, have shown a consistent improvement over the past few quarters, with a gradual increase from Q1 2022 to Q4 2023. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has been comfortably above 3.0 for the majority of the periods under review, indicating a strong liquidity position.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also demonstrated a positive trend, remaining above 2.0 in all periods. This suggests that the company has a sufficient level of highly liquid assets to meet its short-term liabilities without relying on inventory.
The cash ratio, representing the most conservative measure of liquidity by focusing solely on cash and cash equivalents, has also remained at healthy levels above 1.0 across all periods. This indicates that Edwards Lifesciences Corp has a solid ability to cover its immediate liabilities with its available cash resources.
Overall, the liquidity ratios of Edwards Lifesciences Corp paint a picture of a financially stable company with a strong ability to meet its short-term obligations and weather unforeseen financial challenges.
See also:
Edwards Lifesciences Corp Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 157.13 | 147.41 | 148.40 | 145.13 | 136.46 | 122.97 | 119.69 | 118.10 | 110.01 | 125.46 | 135.08 | 143.08 | 138.28 | 142.26 | 91.41 | 76.96 | 116.74 | 77.14 | 80.67 | 86.00 |
The cash conversion cycle of Edwards Lifesciences Corp has shown fluctuations over the past eight quarters. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales.
In Q4 2023, the cash conversion cycle increased to 306.62 days, reflecting slower conversion of investments into cash flow compared to the previous quarter. This increase was also observed from Q3 to Q2 2023. However, there was a slight improvement in Q1 2023 compared to Q4 2022.
Looking at a broader trend, there has been a general upward trajectory in the cash conversion cycle since Q1 2022, indicating potential inefficiencies in managing inventory, accounts receivable, and accounts payable. The cycle peaked in Q4 2023 at 306.62 days, marking the longest period in the given timeframe.
Overall, Edwards Lifesciences Corp may need to focus on optimizing its working capital management practices to shorten the cash conversion cycle and improve its liquidity position. This could involve strategies such as streamlining operations, tightening credit policies, and enhancing inventory management to accelerate cash flow generation.