IDEX Corporation (IEX)

IDEX Corporation's liquidity ratios indicate its ability to meet short-term obligations and manage its current financial position.

1. Current Ratio: The current ratio measures the company's ability to pay its short-term liabilities with its current assets. Over the years, the current ratio has been consistently above 1, indicating the company has more than enough current assets to cover its short-term obligations. The ratio has decreased from 4.15 in 2020 to 2.53 in 2024. While the current ratio is still above 1, the downward trend suggests a reduction in short-term liquidity.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. The quick ratio has shown a decline from 2.57 in 2020 to 0.99 in 2024. This indicates a reduced ability to meet short-term obligations without relying on inventory, signaling potential liquidity challenges.

3. Cash Ratio: The cash ratio specifically focuses on the company's ability to cover current liabilities with cash and cash equivalents. Like the quick ratio, the cash ratio has decreased over the years, from 2.57 in 2020 to 0.99 in 2024. This signifies a declining capacity to meet short-term obligations solely through cash holdings.

Overall, the decreasing trend in the current, quick, and cash ratios from 2020 to 2024 suggests that IDEX Corporation may face increasing liquidity pressure. It is important for the company to closely monitor its liquidity position and take necessary measures to maintain healthy levels of short-term solvency.

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Additional liquidity measure

The cash conversion cycle of IDEX Corporation has shown some fluctuation over the years based on the provided data.

On December 31, 2020, the company's cash conversion cycle was 79.91 days, indicating that on average it took IDEX Corporation approximately 79.91 days to convert its investments in inventory and other resources into cash flows from sales.

By December 31, 2021, the cash conversion cycle had increased to 87.77 days, suggesting a slightly longer time period for IDEX Corporation to convert its resources into cash.

The trend continued in 2022, with the cash conversion cycle further extending to 97.94 days, reflecting a potential slowdown in the company's ability to efficiently manage its working capital.

However, by December 31, 2023, the cash conversion cycle had decreased to 84.07 days, indicating an improvement in the efficiency of IDEX Corporation in converting its investments into cash.

In the most recent year of December 31, 2024, the cash conversion cycle slightly decreased to 86.01 days, suggesting that the company is still working on optimizing its working capital management.

Overall, the fluctuation in IDEX Corporation's cash conversion cycle over the years highlights the importance of effectively managing working capital and operational efficiency in driving the company's cash flow and financial performance.