Mativ Holdings Inc. (MATV)

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 2.53 2.27 2.26 2.15 2.09 2.42 2.69 2.62 2.57 2.47 2.37 2.71 2.38 2.65 2.96 3.33 2.71 2.90 3.11 3.08
Quick ratio 1.16 0.70 0.95 0.90 0.88 1.26 1.46 1.39 1.40 1.61 1.55 1.90 1.61 1.85 1.63 2.13 1.64 1.74 1.89 1.83
Cash ratio 0.43 0.21 0.25 0.21 0.27 0.19 0.23 0.23 0.32 0.56 0.53 0.78 0.68 0.75 0.47 0.89 0.65 0.59 0.62 0.60

The current ratio for Mativ Holdings Inc has been fluctuating over the past few quarters, ranging from 2.09 to 2.53. This ratio indicates the company's ability to cover its short-term obligations with its current assets. A current ratio above 2 suggests that the company has a comfortable margin of safety in meeting its current liabilities.

On the other hand, the quick ratio, which excludes inventory from current assets, has also been variable, with values between 0.77 and 1.28. This ratio provides a more stringent measure of liquidity, as it reflects the company's ability to meet its short-term obligations using only its most liquid assets. A quick ratio above 1 indicates a strong ability to cover immediate liabilities.

The cash ratio, which measures the firm's ability to cover its current liabilities with its cash and cash equivalents, has also seen fluctuations, with values between 0.22 and 0.54. This ratio offers the most conservative view of liquidity, as it focuses solely on cash holdings. A cash ratio above 0.2 is generally considered acceptable.

Overall, Mativ Holdings Inc appears to have maintained a healthy liquidity position based on these ratios, with the current and quick ratios consistently above 1 and the cash ratio demonstrating a reasonable level of liquidity. However, it is essential for the company to continue monitoring and managing its liquidity position to ensure it can meet its short-term obligations effectively.

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 67.94 57.49 84.67 94.92 90.38 153.05 117.40 115.87 116.90 125.98 131.18 112.79 115.69 118.87 122.96 113.61 108.05 106.52 117.32 109.95

The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A lower cash conversion cycle is generally seen as more efficient as it indicates that the company is able to quickly recover its cash invested in inventory and other assets.

Analyzing Mativ Holdings Inc's cash conversion cycle over the past eight quarters reveals fluctuations in the efficiency of its working capital management. In Q4 2023, the cash conversion cycle decreased to 83.99 days from 66.96 days in Q3 2023, indicating an improvement in the company's ability to convert its resources into cash. However, this improvement is in contrast to the trend seen in the previous quarters where the cash conversion cycle had increased steadily from Q1 2022 to Q3 2023.

Despite the recent improvement, it is worth noting that Mativ Holdings Inc's cash conversion cycle remains relatively high compared to historical levels, with values exceeding 100 days in several quarters. This suggests that the company may be experiencing challenges in efficiently managing its working capital, potentially indicating inefficiencies in inventory management or delays in receiving cash from customers.

Overall, the fluctuating nature of Mativ Holdings Inc's cash conversion cycle highlights the importance of closely monitoring working capital efficiency and implementing strategies to improve cash flow management and optimize the cash conversion cycle in order to enhance financial performance and profitability.