Hillenbrand Inc (HI)

The liquidity ratios of Hillenbrand Inc have shown a declining trend over the past five years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, decreased from 1.74 in 2019 to 1.25 in 2023. This indicates a potential weakening in the company's short-term liquidity position.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also exhibited a downward trajectory from 1.44 in 2019 to 0.79 in 2023. This suggests a reduced ability to cover immediate liabilities without relying on the sale of inventory.

Furthermore, the cash ratio, which focuses specifically on the ability to cover current liabilities with cash and cash equivalents, declined from 0.76 in 2019 to 0.28 in 2023. The decreasing trend in this ratio indicates a diminishing capacity to settle short-term obligations solely with available cash resources.

Overall, the declining liquidity ratios of Hillenbrand Inc raise concerns about its short-term financial flexibility and ability to meet its immediate financial obligations. It is important for the company to closely monitor and actively manage its liquidity position to ensure it remains financially sound.

---

Additional liquidity measure

The cash conversion cycle (CCC) of Hillenbrand Inc has displayed fluctuations over the past five years, indicating changes in the efficiency of its cash management and working capital. In 2023, the CCC increased to 112.53 days from 83.76 days in 2022, reflecting a lengthening of the time it takes to convert resources invested in inventory and accounts receivable into cash. This may imply potential challenges in the company's liquidity management.

Comparing 2023 to 2021, there was a notable increase from 66.37 to 112.53 days, suggesting a significant slowdown in the conversion of working capital into cash. However, in 2021, the CCC was relatively longer than in 2020 but improved from 84.94 days, which might have been a result of more efficient management of inventory and receivables.

In 2019, the CCC saw a substantial decrease to 62.11 days, indicating a more efficient cash management process, possibly due to improved inventory and receivables turnover. Overall, there appears to be a fluctuating trend in the company's cash conversion cycle, reflecting variability in its working capital management effectiveness.