Lindsay Corporation (LNN)

Lindsay Corporation has shown consistent strength in its liquidity position based on its current, quick, and cash ratios over the past five years.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has been increasing steadily from 3.01 in 2021 to 3.92 in 2024. This indicates that Lindsay Corporation has healthy liquidity levels and is well-positioned to meet its short-term financial obligations.

Similarly, the quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. Lindsay Corporation's quick ratio has also shown an upward trend, increasing from 1.74 in 2021 to 2.44 in 2024. This suggests that the company has a strong ability to meet its short-term liabilities with its most liquid assets.

Moreover, the cash ratio, which focuses solely on the ability to cover current liabilities with cash and cash equivalents, has exhibited a consistent improvement over the years. The cash ratio increased from 1.06 in 2021 to 1.52 in 2024, indicating that Lindsay Corporation has a solid cash position to meet its immediate financial obligations.

Overall, the liquidity ratios of Lindsay Corporation reflect a sound financial position with ample liquidity to support its operations and fulfill its short-term obligations.

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Additional liquidity measure

The cash conversion cycle for Lindsay Corporation has shown variability over the past five years. In FY2024, the cash conversion cycle was 172.79 days, representing an increase compared to the prior year. This indicates that it took the company longer to convert its investments in inventory and accounts receivable into cash during this period.

Looking at the trend over the five-year period, there has been fluctuation in the cash conversion cycle, with some years showing improvements (e.g., FY2023 and FY2022) and others showing deterioration (e.g., FY2024 and FY2020). This suggests that the company's efficiency in managing its working capital has not been consistent.

Overall, the analysis of the cash conversion cycle for Lindsay Corporation indicates the need for further evaluation of its working capital management strategies to ensure optimal cash flow and operational efficiency in the future.