Henry Schein Inc (HSIC)

Henry Schein Inc's liquidity ratios have shown some fluctuations over the years.

1. Current Ratio: The current ratio has been relatively stable over the years, ranging from 1.42 to 1.79. This indicates that the company has generally been able to cover its short-term obligations with its current assets. A current ratio above 1.0 is typically considered healthy, and Henry Schein Inc has maintained a level above this threshold.

2. Quick Ratio: The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has shown some variability, ranging from 0.57 to 0.81. This indicates that the company may have had some difficulty in meeting its short-term obligations without relying on inventory in certain years.

3. Cash Ratio: The cash ratio, which is the most conservative measure of liquidity as it considers only cash and cash equivalents, has been relatively low, ranging from 0.04 to 0.18. This suggests that Henry Schein Inc may have limited cash reserves to cover its immediate liabilities.

Overall, while the current ratio indicates that the company has been able to meet its short-term obligations with its current assets, the decreasing trend in the quick ratio and the consistently low cash ratio raise some concerns about the company's ability to handle financial challenges in the short term.

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Additional liquidity measure

The cash conversion cycle is a key metric that reflects how efficiently a company manages its working capital. For Henry Schein Inc, the trend in the cash conversion cycle from 2020 to 2024 shows fluctuations.

In 2020, the cash conversion cycle stood at 70.65 days. It decreased slightly to 67.99 days by the end of 2021, indicating an improvement in the efficiency of converting its resources into cash. However, in 2022, the cycle increased to 71.04 days, suggesting a delay in the company's cash conversion process.

By the end of 2023, the cash conversion cycle further increased to 80.23 days, reaching its peak during the period under review. This prolonged cycle may indicate challenges in managing working capital effectively or delays in converting inventory or receivables into cash.

In 2024, the cash conversion cycle improved to 68.37 days, showing a positive trend compared to the previous year. This reduction may suggest that Henry Schein Inc took measures to streamline its operations and enhance its cash conversion efficiency.

Overall, closely monitoring and managing the cash conversion cycle is essential for Henry Schein Inc to optimize its working capital management and sustain healthy cash flows.