Mativ Holdings Inc. (MATV)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 94,300 | 120,200 | 124,400 | 74,700 | 54,700 |
| Short-term investments | US$ in thousands | — | — | — | — | 59,000 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 274,500 | 281,400 | 466,100 | 231,100 | 166,900 |
| Quick ratio | 0.34 | 0.43 | 0.27 | 0.32 | 0.68 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($94,300K
+ $—K
+ $—K)
÷ $274,500K
= 0.34
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1 indicates that the company may have difficulty meeting its short-term liabilities.
For Mativ Holdings Inc., the quick ratio has shown a declining trend over the past five years. As of December 31, 2020, the quick ratio was 0.68, indicating that the company had $0.68 in liquid assets to cover each dollar of current liabilities. However, this ratio decreased to 0.32 by December 31, 2021, and further dropped to 0.27 by December 31, 2022.
Although there was a slight improvement in the quick ratio to 0.43 by December 31, 2023, it remained below 1, suggesting that Mativ Holdings Inc. still may have challenges meeting its short-term obligations using its liquid assets. The ratio decreased again to 0.34 by December 31, 2024.
Overall, the decreasing trend in the quick ratio for Mativ Holdings Inc. raises concerns about the company's liquidity position and its ability to efficiently manage its short-term obligations in the coming years. It is essential for the company to closely monitor its liquidity management practices and explore avenues to improve its quick ratio for better financial stability and risk management.
Peer comparison
Dec 31, 2024