Innospec Inc (IOSP)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 2.58 | 2.38 | 2.15 | 2.16 | 2.24 |
| Quick ratio | 1.70 | 1.52 | 1.19 | 1.27 | 1.29 |
| Cash ratio | 0.78 | 0.55 | 0.36 | 0.42 | 0.42 |
Innospec Inc's liquidity ratios demonstrate a consistently healthy liquidity position over the years.
The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has been above 2 for the past five years. This indicates that Innospec has more than enough current assets to cover its current liabilities, providing a cushion in case of unexpected financial needs.
Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown a favorable trend, staying above 1 throughout the period. This implies that even without considering inventory, Innospec has sufficient liquid assets to meet its short-term liabilities.
Moreover, the cash ratio, which focuses solely on the most liquid assets like cash and equivalents to cover current liabilities, has shown an increasing trend from 0.42 in 2020 to 0.78 in 2024. This indicates that the company has improved its ability to cover its immediate obligations with cash on hand.
Overall, these liquidity ratios suggest that Innospec Inc has maintained a strong financial position with ample liquid resources to meet its short-term obligations, indicating its ability to withstand potential financial challenges.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 95.64 | 95.62 | 105.49 | 105.32 | 105.95 |
The cash conversion cycle of Innospec Inc has shown a consistent trend over the past five years. As of December 31, 2020, the company's cash conversion cycle was 105.95 days, which decreased slightly to 105.32 days by the end of 2021. It then increased marginally to 105.49 days by the end of 2022.
However, there was a significant improvement in efficiency noted in the company's operations by the end of 2023, with the cash conversion cycle decreasing to 95.62 days. This positive trend continued into 2024, with the cycle remaining relatively stable at 95.64 days.
Overall, the decreasing trend in the cash conversion cycle from 2020 to 2024 indicates that Innospec Inc has become more effective in managing its cash flow, inventory turnover, and accounts receivable, which may signify improved liquidity and operational efficiency in the company.