Gates Industrial Corporation plc (GTES)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 3.08 | 3.03 | 2.66 | 2.63 | 2.98 |
| Quick ratio | 1.98 | 1.91 | 1.62 | 1.71 | 2.05 |
| Cash ratio | 0.96 | 0.81 | 0.77 | 0.72 | 0.97 |
Gates Industrial Corporation plc's liquidity ratios have demonstrated a generally positive trend over the past five years. The current ratio, which indicates the company's ability to cover its short-term obligations with current assets, has consistently remained above 2, reflecting a healthy financial position. The slight increase in the current ratio from 2.98 in 2019 to 3.08 in 2023 suggests an improvement in the company's liquidity position.
Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has shown a favorable trend, staying above 1 over the years. The quick ratio increased from 2.05 in 2019 to 1.98 in 2023, indicating that Gates Industrial Corporation plc has sufficient cash and near-cash assets to meet its short-term liabilities.
The cash ratio, which provides an even more conservative measure of liquidity by considering only cash and cash equivalents, has also exhibited positive movement. The cash ratio has generally been above 0.7 across the years, with a notable improvement from 0.97 in 2019 to 0.96 in 2023.
Overall, Gates Industrial Corporation plc's liquidity ratios suggest that the company is well-equipped to meet its short-term financial obligations, with a strong ability to convert assets into cash when needed. This liquidity position provides a favorable outlook for the company's financial health and operational stability.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 112.92 | 113.94 | 106.48 | 113.41 | 103.60 |
The cash conversion cycle of Gates Industrial Corporation plc has fluctuated over the past five years. In 2023, it decreased slightly to 112.92 days from 113.94 days in 2022. This indicates that the company took less time to convert its investments in inventory and other resources into cash receipts from sales. However, compared to 2021 when the cycle was 106.48 days, the company has seen a slight increase in the time taken to convert its resources into cash.
Overall, the company's cash conversion cycle has remained relatively stable, with minor variations from year to year. It is important for Gates Industrial Corporation plc to closely monitor and manage its cash conversion cycle to ensure efficient use of resources and optimize cash flow in the future.