Ingredion Incorporated (INGR)

The liquidity ratios of Ingredion Inc, as reflected by the current ratio, quick ratio, and cash ratio, have shown fluctuating trends over the past five years.

The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has generally been above 1, indicating a healthy liquidity position. However, there has been a slight decline from 2.23 in 2019 to 1.92 in 2023, suggesting a potential decrease in the company's ability to cover its short-term liabilities with current assets.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has fluctuated over the years. While the ratio has generally been above 1, indicating the company's ability to meet its short-term obligations without relying on inventory, there has been some inconsistency in the trend, with a notable decrease from 1.34 in 2019 to 0.91 in 2022.

The cash ratio, which specifically assesses the company's ability to cover its short-term liabilities with cash and cash equivalents, has also varied over the years. There was a sharp increase in the ratio from 0.16 in 2022 to 0.38 in 2023, suggesting a stronger cash position relative to the immediate liabilities.

Overall, while Ingredion Inc has maintained a generally solid liquidity position over the years, there have been fluctuations in the ratios, indicating the need for further monitoring to ensure the company's ability to meet its short-term obligations efficiently.

---

Additional liquidity measure

The cash conversion cycle of Ingredion Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle decreased to 95.47 days from 105.77 days in 2022, indicating an improvement in the efficiency of its working capital management. This suggests that on average, it takes Ingredion Inc 95.47 days to convert its investments in inventory and other resources into cash inflows from sales.

The decrease in the cash conversion cycle from 2022 to 2023 could be attributed to better inventory management or faster collection of receivables. Despite this improvement, the company's cash conversion cycle in 2023 is still higher than in 2021, when it was 85.94 days.

Overall, Ingredion Inc's cash conversion cycle has shown some variability in recent years, but maintaining a lower cycle duration can indicate effective management of working capital and cash flow within the organization. Further analysis of the underlying components of the cash conversion cycle may provide additional insights into the company's operational efficiency and liquidity management.