Mercer International Inc (MERC)
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 | 3.82 | 3.97 | 2.70 | 3.12 | 3.12 | 3.39 | 4.27 | 4.16 | 3.76 | 3.71 | 3.53 | 4.06 | 4.13 | 4.16 | 3.98 | 4.26 | 3.30 | 3.84 | 3.76 | 3.98 |
| Quick ratio | 2.17 | 2.28 | 1.48 | 1.69 | 1.87 | 2.13 | 2.93 | 2.84 | 2.57 | 2.48 | 2.47 | 2.95 | 3.00 | 2.97 | 2.85 | 2.75 | 2.18 | 2.42 | 2.38 | 2.55 |
| Cash ratio | 1.10 | 1.28 | 0.58 | 0.79 | 0.94 | 1.12 | 1.81 | 1.46 | 1.22 | 1.49 | 1.62 | 1.92 | 1.92 | 1.96 | 1.79 | 1.55 | 1.37 | 1.30 | 1.15 | 1.10 |
Mercer International Inc.'s liquidity ratios demonstrate fluctuations over the past eight quarters. The current ratio, reflecting the company's ability to cover short-term obligations with its current assets, ranged from a low of 2.70 in Q2 2023 to a high of 4.27 in Q2 2022. This indicates that the company had improved short-term liquidity in the second quarter of 2022 but experienced a decline in the second quarter of 2023.
The quick ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets, also varied during the period. It ranged from a low of 1.54 in Q2 2023 to a high of 2.99 in Q2 2022. The quick ratio generally remained above 1, indicating that Mercer International Inc. can meet its short-term obligations without relying on the sale of inventory.
The cash ratio, representing the most conservative measure of liquidity by only considering cash and cash equivalents, showed similar fluctuations. The ratio fluctuated between 0.63 in Q2 2023 and 1.87 in Q2 2022. This suggests that while the company had a strong cash position in the second quarter of 2022, its cash reserves decreased in the second quarter of 2023.
Overall, Mercer International Inc.'s liquidity ratios indicate a generally healthy liquidity position, with the company consistently able to pay off its short-term obligations using its current assets. However, the fluctuations in the ratios over the analyzed period suggest the need for monitoring and potential adjustments to maintain optimal liquidity levels.
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 | 115.52 | 104.51 | 114.27 | 138.39 | 125.14 | 114.28 | 112.42 | 137.57 | 154.31 | 126.57 | 113.70 | 118.10 | 118.77 | 108.44 | 106.16 | 119.49 | 129.04 | 205.51 | 536.76 | 579.68 |
The cash conversion cycle for Mercer International Inc. has fluctuated over the past eight quarters. In Q1 2023, the company had the longest cash conversion cycle, taking 149.05 days to convert its investments in inventory and other resources into cash. This was followed by 118.77 days in Q4 2023, indicating some improvement in the efficiency of the company's cash conversion process.
Conversely, Q2 2022 had the shortest cash conversion cycle of 116.03 days, suggesting that Mercer International Inc. was more effective in managing its working capital during that period. Overall, there seems to be some variability in the company's cash conversion cycle, with fluctuations observed across different quarters.
It is important for Mercer International Inc. to closely monitor and manage its cash conversion cycle to optimize its liquidity and working capital efficiency. Analyzing trends in the cash conversion cycle can provide insights into the company's operational efficiency and effectiveness in managing its working capital resources.