Quaker Chemical Corporation (KWR)

Quaker Chemical Corporation's liquidity ratios display a consistently healthy liquidity position over the five-year period from 2020 to 2024.

The current ratio has steadily increased from 2.07 in 2020 to 2.31 in 2024, indicating the company's ability to cover its short-term obligations with its current assets. This trend suggests an improving liquidity position over the years, providing a buffer against potential financial challenges.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also shows a similar pattern. It has fluctuated slightly but remained above 1 in all years, with a range from 1.38 in 2021 to 1.84 in 2022. This indicates that Quaker Chemical can meet its short-term liabilities without relying on selling inventory, reflecting a strong liquidity position.

Furthermore, the cash ratio, which focuses solely on the most liquid assets like cash and cash equivalents, has ranged from 0.38 in 2021 to 0.54 in 2023. This indicates the company's ability to cover its current liabilities with its cash reserves alone, providing a measure of the immediate liquidity available.

Overall, Quaker Chemical Corporation's liquidity ratios suggest a stable and robust financial position, with increasing current and quick ratios over the years indicating a strengthening liquidity profile. The cash ratio also demonstrates a prudent level of liquid assets relative to its short-term obligations.

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Additional liquidity measure

The cash conversion cycle of Quaker Chemical Corporation has shown fluctuations over the past five years. In 2020, the company's cash conversion cycle was 97.24 days, which increased slightly to 98.76 days by the end of 2021. However, in 2022, there was a notable increase to 108.43 days before decreasing to 96.43 days in 2023. The most recent data for 2024 indicates a further improvement, with the cash conversion cycle decreasing to 85.84 days.

Overall, the trend in the cash conversion cycle of Quaker Chemical Corporation shows some variability, with periods of both increases and decreases. It is important for the company to monitor and manage its cash conversion cycle effectively to ensure efficient use of its working capital and optimize its cash flow operations.