Mativ Holdings Inc. (MATV)

Mativ Holdings Inc has maintained a relatively stable current ratio over the past five years, ranging from 2.09 to 2.71, indicating the company's ability to meet its short-term obligations with its current assets. However, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has shown more variability, ranging from 0.94 to 1.68. This suggests that the company's liquidity position may be more sensitive to changes in inventory levels.

Furthermore, the cash ratio, which specifically looks at the ability to cover current liabilities with cash and cash equivalents, has also shown some fluctuations over the years, ranging from 0.33 to 0.69. Mativ Holdings Inc appears to have improved its cash position in the most recent year compared to previous years.

Overall, Mativ Holdings Inc's liquidity ratios indicate a generally healthy liquidity position, with the current and quick ratios comfortably above 1, reflecting the company's ability to cover short-term obligations. However, management should continue to monitor and manage inventory levels and focus on maintaining an adequate cash position to ensure sustainable liquidity in the future.

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Additional liquidity measure

The cash conversion cycle of Mativ Holdings Inc has shown some fluctuations over the past five years. In 2023, the cash conversion cycle decreased to 83.99 days compared to the previous year. This indicates that the company took fewer days to convert its investments in inventory and other resources into cash during the most recent fiscal year.

However, looking at the trend over the past five years, the cash conversion cycle has generally remained relatively stable. Despite some variations, the company has consistently operated within the range of 100 to 110 days to convert its resources into cash. This suggests that Mativ Holdings Inc has been managing its working capital efficiently, neither excessively tying up funds in inventory and receivables nor facing significant challenges in converting these assets into cash.

Overall, a lower cash conversion cycle implies that the company is improving its efficiency in managing its working capital and generating cash from its operations promptly. However, it is important for Mativ Holdings Inc to continue monitoring and optimizing its cash conversion cycle to ensure continued financial health and operational efficiency.