Mativ Holdings Inc. (MATV)

Based on the provided data, let's analyze the liquidity ratios of Mativ Holdings Inc.:

1. Current Ratio:
- The current ratio measures the company's ability to meet its short-term obligations with its current assets.
- Mativ Holdings Inc.'s current ratio has been fluctuating over the years. It increased from 2.38 in 2020 to 2.57 in 2021, dropped to 2.09 in 2022, and then rose again to 2.53 in 2023 before slightly decreasing to 2.40 in 2024.
- Overall, the company maintains a current ratio above 1, indicating that it has more than enough current assets to cover its short-term liabilities in most years.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets.
- Mativ Holdings Inc.'s quick ratio has shown a declining trend over the years. It started at 0.68 in 2020, dropped significantly to 0.32 in 2021, further decreased to 0.27 in 2022, improved slightly to 0.43 in 2023, and then decreased again to 0.34 in 2024.
- The decreasing trend in the quick ratio suggests that the company may face challenges in meeting its short-term obligations using its most liquid assets.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio as it only considers cash and cash equivalents to cover current liabilities.
- Mativ Holdings Inc.'s cash ratio has been consistent over the years, matching the values of the quick ratio. It started at 0.68 in 2020, dropped to 0.32 in 2021, decreased further to 0.27 in 2022, improved to 0.43 in 2023, and then slightly decreased to 0.34 in 2024.
- The company's cash ratio indicates that it has a sufficient level of cash to cover its immediate short-term liabilities, but there may be room for improvement in increasing liquidity through other liquid assets besides cash.

In conclusion, while Mativ Holdings Inc. maintains a current ratio above 1, signifying a healthy ability to meet short-term obligations with current assets, the declining trend in the quick ratio and cash ratio implies a potential need for better management of liquidity to enhance the company's ability to cover short-term liabilities without relying heavily on inventory. It would be advisable for the company to monitor and manage its liquidity position closely to ensure financial stability in the future.

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Additional liquidity measure

The cash conversion cycle of Mativ Holdings Inc. has shown fluctuations over the past five years. Starting at 85.62 days on December 31, 2020, the cycle decreased slightly to 85.35 days on December 31, 2021. However, there was a significant increase to 112.87 days on December 31, 2022, indicating potential challenges in managing the cash conversion process efficiently.

Fortunately, the company managed to improve its cash conversion cycle over the following years. By December 31, 2023, the cycle decreased to 77.25 days, showing a positive trend towards more efficient working capital management. Subsequently, on December 31, 2024, the cycle further improved to 80.16 days.

Overall, the company has experienced fluctuations in its cash conversion cycle, with a notable spike in 2022 followed by a recovery in the subsequent years. It is essential for Mativ Holdings Inc. to continue monitoring and optimizing its cash conversion cycle to ensure effective management of its working capital and liquidity position.