International Flavors & Fragrances Inc (IFF)

The current ratio measures the ability of a company to meet its short-term obligations using its current assets. International Flavors & Fragrances Inc. has maintained a fairly stable current ratio over the past five years, ranging from 1.61 to 1.99, with a value of 1.67 as of December 31, 2023. This indicates that the company has had a solid level of current assets relative to its current liabilities, suggesting a good short-term liquidity position.

The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of liquidity by excluding inventory from current assets. International Flavors & Fragrances Inc. has shown some fluctuations in its quick ratio over the years, ranging from 0.82 to 1.16, with a value of 0.88 at the end of 2023. This implies that the company may have slightly lower liquidity when inventory is excluded, but it still has sufficient liquid assets to cover its current liabilities.

The cash ratio, which is the most conservative liquidity ratio, focuses solely on a company's ability to cover its current liabilities using only cash and cash equivalents. International Flavors & Fragrances Inc. has also experienced variability in its cash ratio, ranging from 0.20 to 0.50, with a value of 0.37 at the end of 2023. This indicates that the company's reliance on cash to meet short-term obligations has increased compared to the previous year but is still at a reasonable level.

Overall, based on the liquidity ratios analyzed, International Flavors & Fragrances Inc. appears to have maintained a relatively stable and healthy liquidity position over the past five years, with adequate resources to meet its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle of International Flavors & Fragrances Inc. has shown fluctuations over the past five years. In particular:
- In 2023, the cash conversion cycle decreased to 112.27 days, indicating an improvement in the company's efficiency in managing its cash flow from operations, inventory, and receivables.
- In 2022, there was a significant increase in the cash conversion cycle to 144.00 days, suggesting a potential slowdown in the company's cash conversion efficiency compared to the previous year.
- In 2021, the cash conversion cycle decreased to 114.70 days, showing a positive trend towards a more streamlined cash conversion process.
- In 2020, there was a notable increase in the cash conversion cycle to 150.68 days, signifying a delay in converting the company's investments in inventory and receivables into cash.
- In 2019, the cash conversion cycle was 146.59 days, reflecting a similar trend observed in 2020 with a prolonged conversion cycle.

Overall, the company has experienced fluctuations in its cash conversion cycle over the past five years, with improvements in some years and challenges in others. Monitoring and managing the cash conversion cycle is crucial for International Flavors & Fragrances Inc. to optimize its working capital and enhance its financial performance.