Linde plc Ordinary Shares (LIN)

Liquidity ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 0.80 0.83 0.78 0.73 0.79 0.74 0.74 0.84 0.74 0.81 0.71 0.74 0.80 0.83 0.80 0.74 0.85 0.90 1.02 1.35
Quick ratio 0.61 0.61 0.56 0.55 0.62 0.55 0.55 0.64 0.54 0.61 0.51 0.69 0.58 0.62 0.59 0.52 0.58 0.58 0.69 0.92
Cash ratio 0.31 0.27 0.23 0.28 0.34 0.25 0.24 0.31 0.21 0.32 0.21 0.41 0.27 0.35 0.33 0.26 0.23 0.19 0.26 0.52

Liquidity ratios such as the current ratio, quick ratio, and cash ratio provide valuable insights into Linde Plc.'s ability to meet its short-term obligations and cover immediate expenses.

Looking at the trend in the current ratio over the past eight quarters, we can observe fluctuation but an overall declining trend. A current ratio below 1 indicates that Linde may have difficulty meeting its short-term liabilities with its current assets alone. It appears that the company's current assets may not be sufficient to cover its current liabilities without relying on external sources of funding.

Similarly, the quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also shows a downward trend over the period. This indicates that Linde's ability to cover its short-term obligations with its most liquid assets is weakening. A quick ratio below 1 suggests potential challenges in meeting immediate payment requirements without having to rely on selling inventory.

The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, follows a similar downward trend. A cash ratio below 1 implies that Linde may not have enough cash to cover its current liabilities. The decreasing trend in the cash ratio raises concerns about the company's ability to handle unexpected expenses or emergencies without seeking additional sources of liquidity.

In conclusion, the liquidity ratios of Linde Plc. have been declining over the quarters, indicating potential liquidity challenges and the need for the company to closely monitor its cash flow and working capital management to ensure it can meet its short-term obligations effectively.

See also:

Linde plc Ordinary Shares Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 39.32 43.02 40.30 40.24 36.51 34.34 32.21 31.15 25.73 31.69 31.15 33.62 32.98 33.64 34.21 31.56 23.78 18.87 1.72 -65.12

The cash conversion cycle of Linde Plc. has shown some fluctuations over the last eight quarters. Generally, the company has been able to efficiently manage its working capital during this period. The cycle peaked in Q3 2023 at 38.75 days, but decreased in Q4 2023 to 35.51 days. This suggests that the company improved its efficiency in converting its investments in raw materials and other inputs into cash.

Comparing year-on-year performance, the cash conversion cycle has been increasing gradually, indicating a potential slowdown in the company's ability to convert its resources into cash. However, the cycle remains relatively stable around the mid-30s range, which indicates that the company has been able to effectively manage its operating cash flow and working capital requirements.

Overall, from the trend analysis of the cash conversion cycle of Linde Plc., it can be observed that the company has been maintaining a reasonable balance between managing its working capital components efficiently and optimizing its cash flow conversion process. Further monitoring of this metric will be necessary to assess its impact on the company's operational and financial performance in the future.