Corning Incorporated (GLW)

Based on the liquidity ratios of Corning, Inc. over the past five years, we can observe the following trends:

1. Current Ratio:
- The current ratio measures the company's ability to meet its short-term obligations with its current assets. A current ratio above 1 indicates that the company has more current assets than current liabilities.
- Corning's current ratio has ranged from 1.44 to 2.12 over the past five years. The ratio has shown some fluctuations but generally remained above 1, reflecting that the company has had sufficient current assets to cover its short-term liabilities.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets. It provides insight into how well the company can meet its short-term obligations without relying on the sale of inventory.
- Corning's quick ratio has varied from 0.88 to 1.48 over the last five years. The ratio has shown fluctuations but has generally improved over time, indicating a stronger ability to meet short-term obligations without relying on inventory liquidation.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, as it only considers cash and cash equivalents to cover current liabilities. It provides an indication of the company's ability to repay its short-term obligations immediately.
- Corning's cash ratio has ranged from 0.55 to 0.94 over the past five years. The ratio has exhibited some fluctuations, with a general downward trend, suggesting a decreasing ability to cover short-term obligations with cash and cash equivalents alone.

Overall, based on these liquidity ratios, Corning, Inc. has generally maintained a healthy liquidity position over the years, ensuring that it can meet its short-term obligations efficiently. The company's current and quick ratios indicate a strong ability to cover short-term liabilities with current assets, while the decreasing trend in the cash ratio signals a slight reduction in the immediate cash coverage of short-term obligations.

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See also:

Corning Incorporated Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle of Corning, Inc. has fluctuated over the past five years. In 2023, the company's cash conversion cycle was 96.18 days, indicating that on average, it takes Corning approximately 96 days to convert raw materials into cash from sales. This represents an increase from the prior year, suggesting a potential inefficiency in managing the company's working capital.

Comparing to 2022 and 2021, where the cash conversion cycle was 85.74 days and 87.11 days, respectively, 2023 showed a slight increase in the time taken to convert inventory into cash. This upward trend may indicate a slower collection of receivables or longer payment periods to suppliers, potentially impacting the company's cash flow and liquidity position.

However, the cash conversion cycle in 2020 was notably higher at 128.24 days, signifying a prolonged period to convert inventory, sell goods, and collect cash. This could have strained the company's liquidity and working capital management in that particular year.

In contrast, the cash conversion cycle in 2019 was 94.08 days, relatively closer to the 2023 figure, suggesting a more efficient working capital management compared to 2020.

Overall, Corning, Inc. should aim to carefully monitor and potentially streamline its cash conversion cycle in order to enhance operational efficiency, optimize working capital, and improve cash flow dynamics.