FMC Corporation (FMC)
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 | 1.52 | 1.54 | 1.44 | 1.29 | 1.43 | 1.41 | 1.38 | 1.38 | 1.44 | 1.38 | 1.35 | 1.38 | 1.55 | 1.70 | 1.60 | 1.82 | 1.50 | 1.62 | 1.27 | 1.26 |
| Quick ratio | 0.89 | 0.84 | 0.86 | 0.79 | 0.91 | 0.82 | 0.88 | 0.84 | 0.74 | 0.83 | 0.88 | 0.87 | 1.03 | 1.03 | 1.00 | 1.18 | 0.94 | 0.96 | 0.76 | 0.79 |
| Cash ratio | 0.09 | 0.09 | 0.22 | 0.11 | 0.15 | 0.11 | 0.15 | 0.10 | 0.00 | 0.10 | 0.19 | 0.12 | 0.20 | 0.13 | 0.13 | 0.18 | 0.12 | 0.17 | 0.03 | 0.03 |
The current ratio for FMC Corp. has generally been above 1, indicating that the company has had sufficient current assets to cover its current liabilities over the past eight quarters. The current ratio peaked at 1.54 in Q3 2023 and hit a low of 1.29 in Q1 2023.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has been somewhat lower than the current ratio. It has fluctuated between 0.88 and 1.01 over the same period. This suggests that while the company's quick assets (current assets excluding inventory) could cover its current liabilities, there is a smaller margin of safety compared to the current ratio.
The cash ratio, which is the most conservative measure of liquidity, focuses solely on the company's ability to cover its current liabilities with its cash and cash equivalents. FMC Corp.'s cash ratio has varied between 0.19 and 0.32, indicating that the company has had a varying ability to cover its short-term obligations with its readily available cash resources.
Overall, FMC Corp. has maintained adequate liquidity levels over the past two years, with the current, quick, and cash ratios generally staying within acceptable ranges. However, fluctuations in these ratios highlight the importance of monitoring the company's liquidity position regularly to ensure it can meet its short-term obligations effectively.
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 | 335.14 | 319.52 | 283.37 | 266.32 | 217.49 | 240.51 | 249.69 | 267.27 | 236.45 | 237.92 | 238.18 | 227.03 | 204.21 | 222.82 | 227.69 | 224.26 | 193.55 | 220.70 | 233.93 | 229.59 |
The cash conversion cycle of FMC Corp. has shown consistent fluctuations over the past eight quarters. The company's cash conversion cycle increased from Q1 2022 to Q4 2022, peaking at 266.91 days, before starting a downward trend in Q1 2023. However, it increased in Q2 2023 before decreasing again in Q3 and Q4 2023.
On average, FMC Corp. took 307.73 days to convert its investments in inventory into cash receipts from customers and then back into cash through payments to suppliers over the last eight quarters. This indicates that the company's operating efficiency has varied significantly throughout this period. Further analysis to identify the underlying reasons for these fluctuations and strategies to optimize the cash conversion cycle may be warranted.