Haemonetics Corporation (HAE)

Haemonetics Corporation's liquidity ratios show fluctuations over the past five years. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has varied considerably, from a high of 3.06 in 2023 to a low of 1.71 in 2022. The current ratio stands at 2.56 as of March 31, 2024, indicating that the company has $2.56 in current assets for every $1 in current liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also demonstrates fluctuations. Haemonetics' quick ratio has ranged from 0.95 in 2022 to 1.85 in 2023, with the latest figure at 1.28 as of March 31, 2024. This suggests that the company has $1.28 in liquid assets available to cover each dollar of current liabilities.

The cash ratio, the most conservative liquidity ratio, reflects Haemonetics' ability to cover current liabilities with cash and cash equivalents alone. The company's cash ratio has varied from 0.50 in 2020 to 1.13 in 2023, with the latest figure standing at 0.60 as of March 31, 2024. This indicates that Haemonetics has $0.60 in cash and cash equivalents for every dollar of current liabilities.

Overall, while the current ratio and quick ratio indicate a relatively strong liquidity position for Haemonetics, the cash ratio has shown more volatility. It is essential for the company to continue monitoring its liquidity ratios to ensure it maintains sufficient liquidity to meet its short-term obligations.

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Additional liquidity measure

The cash conversion cycle for Haemonetics Corporation has fluctuated over the past five years. In fiscal year 2024, the company's cash conversion cycle stood at 104.78 days, showing a slight increase from the previous year. This indicates that it took Haemonetics about 104.78 days to convert its investments in inventory back into cash from sales during that fiscal year.

Comparing this to the trend over the past few years, we see that the company has managed to improve its cash conversion cycle since fiscal year 2021 when it was at its highest level of 170.43 days. This suggests that Haemonetics has become more efficient in managing its working capital, inventory, and accounts receivable, resulting in a quicker conversion of assets into cash.

Despite the improvement seen in recent years, the company still has room for further optimization of its cash conversion cycle to enhance its liquidity and operational efficiency. Monitoring this metric going forward will be crucial for evaluating Haemonetics' financial health and performance in converting its resources into cash.