Flowserve Corporation (FLS)

Flowserve Corporation's liquidity ratios have shown a declining trend over the past five years.

- The current ratio, a measure of the company's ability to cover short-term liabilities with its current assets, decreased from 2.54 in 2020 to 1.98 in 2024. This indicates a slight weakening in Flowserve's short-term liquidity position.

- The quick ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets, also decreased from 0.96 in 2020 to 0.46 in 2024. This suggests a significant decrease in Flowserve's ability to meet its short-term obligations using its most liquid assets.

- The cash ratio, representing the company's ability to pay off its current liabilities using only cash and cash equivalents, mirrored the trend of the quick ratio, decreasing from 0.96 in 2020 to 0.46 in 2024. This indicates a decrease in Flowserve's ability to settle its short-term obligations solely with cash on hand.

Overall, the declining trend in these liquidity ratios suggests that Flowserve Corporation may be facing challenges in maintaining sufficient liquid assets to meet its short-term financial obligations. It is important for the company to closely monitor its liquidity position and take necessary steps to improve it in order to ensure financial stability and operational continuity.

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Additional liquidity measure

The cash conversion cycle of Flowserve Corporation has exhibited some fluctuations over the past five years. Starting in 2020 at 93.26 days, the cycle increased to 99.37 days by the end of 2021, indicating a slight slowdown in the company's ability to convert its resources into cash.

In 2022, the cash conversion cycle continued to lengthen, reaching 111.86 days, suggesting that Flowserve was experiencing challenges in efficiently managing its working capital. However, by the end of 2023, there was a slight improvement as the cycle decreased to 106.25 days, although it remained above the levels seen in the previous years.

The most recent data point, from 2024, shows a further reduction in the cash conversion cycle to 97.84 days. This indicates that Flowserve may have made efforts to streamline its operations and enhance its cash flow management practices.

Overall, the trend observed in Flowserve Corporation's cash conversion cycle indicates some variability, with periods of both lengthening and shortening cycles. It is important for the company to continue monitoring and optimizing its working capital management to ensure efficient cash conversion processes in the future.