Linde plc Ordinary Shares (LIN)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.89 | 0.80 | 0.79 | 0.74 | 0.80 |
| Quick ratio | 0.33 | 0.30 | 0.33 | 0.21 | 0.42 |
| Cash ratio | 0.33 | 0.30 | 0.33 | 0.21 | 0.42 |
Linde plc Ordinary Shares has shown a decreasing trend in its current ratio over the past five years, from 0.80 in December 2020 to 0.89 in December 2024. Although the current ratio is below 1, indicating that the company may have difficulty meeting its short-term obligations with its current assets alone, the gradual increase over the years suggests some improvement in liquidity.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also shows a fluctuating trend, with a low of 0.21 in December 2021 and a high of 0.33 in December 2022 and 2024. This indicates that Linde plc may face challenges in meeting its short-term liabilities using only its most liquid assets.
The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, mirrors the trend of the quick ratio, suggesting that the company has limited cash reserves relative to its current liabilities.
Overall, while Linde plc's liquidity ratios have been fluctuating, the company should continue to monitor and potentially improve its liquidity position to ensure it has the ability to meet its short-term obligations efficiently and effectively.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 41.43 | 44.13 | 37.12 | 36.06 | 41.02 |
The cash conversion cycle of Linde plc Ordinary Shares has shown some fluctuation over the years. It decreased from 41.02 days at the end of December 2020 to 36.06 days at the end of December 2021, indicating an improvement in the company's efficiency in converting its investments in inventory and accounts receivable into cash.
However, in the subsequent years, the cash conversion cycle slightly increased to 37.12 days by December 31, 2022, and further to 44.13 days by December 31, 2023, suggesting a lengthening of the time it takes for the company to convert its working capital into cash.
By the end of December 2024, the cash conversion cycle declined to 41.43 days, still higher than in 2021. This indicates that Linde plc may be facing challenges in managing its working capital effectively, which could potentially impact its liquidity and overall financial performance.
Overall, a company's cash conversion cycle is a crucial metric that reflects its operational efficiency and financial health. Linde plc should closely monitor and manage this metric to ensure optimal working capital management and improved cash flow in the future.