Knowles Cor (KN)

Knowles Cor's current ratio has shown a steady increase from 1.41 in 2020 to 3.66 in 2022, indicating a significant improvement in the company's short-term liquidity position. However, there was a slight decrease to 2.61 in 2023 and further decline to 1.83 in 2024, signaling potential challenges in meeting its short-term obligations.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also exhibited an upward trend from 0.94 in 2020 to 1.85 in 2022. This suggests that the company has a strong ability to meet its short-term liabilities using its most liquid assets. However, there was a drop to 1.19 in 2024, indicating a potential reduction in the company's ability to cover immediate obligations without relying on inventory.

In terms of the cash ratio, which specifically measures the firm's ability to cover its current liabilities with cash and cash equivalents, Knowles Cor has maintained a relatively stable position over the years, with a range between 0.41 to 0.66. This implies that the company has a moderate level of cash reserves available to meet its short-term financial obligations without relying heavily on other current assets.

Overall, while Knowles Cor's liquidity ratios have shown improvements in certain years, the slight declines in recent years suggest a need for the company to closely monitor its liquidity position to ensure it can effectively manage its short-term financial obligations.

---

Additional liquidity measure

The cash conversion cycle of Knowles Cor has fluctuated over the past five years. At the end of December 31, 2020, the company's cash conversion cycle was 107.02 days, which decreased slightly to 106.28 days by the end of December 31, 2021. However, there was a significant increase in the cash conversion cycle to 160.03 days by the end of December 31, 2022.

The trend continued in the subsequent years, with the cash conversion cycle reaching 186.50 days by December 31, 2023, reflecting a further elongation of the cycle. Nonetheless, there was a partial improvement as the cycle decreased to 137.39 days by December 31, 2024.

Overall, the cash conversion cycle of Knowles Cor has shown some variability, with periods of both improvement and deterioration. It is important for the company to closely monitor and manage its cash conversion cycle to optimize working capital efficiency and ensure smooth operations.