Middleby Corp (MIDD)

Middleby Corp's liquidity ratios show an improving trend over the years. The current ratio has increased from 1.81 in 2020 to 2.81 in 2024, indicating the company's ability to meet its short-term obligations has strengthened.

However, the quick ratio declined from 0.38 in 2020 to 0.83 in 2024. This implies that while the company's ability to cover immediate liabilities with its most liquid assets has improved, the rapid increase in the current ratio is mainly due to an increase in current assets other than cash and equivalents.

The cash ratio also shows an improvement from 0.38 in 2020 to 0.83 in 2024, reflecting that Middleby Corp's ability to cover its short-term liabilities with cash and cash equivalents has strengthened significantly, which is a positive sign for short-term financial health.

Overall, the increasing trend in current and cash ratios, despite some fluctuations in the quick ratio, suggests that Middleby Corp's liquidity position has been generally improving, which is favorable for its financial stability.

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Additional liquidity measure

Middleby Corp's cash conversion cycle has shown fluctuations over the years based on the data provided.

- As of December 31, 2020, the cash conversion cycle stood at 120.87 days, indicating that it took the company approximately this number of days to convert its investments in inventory and accounts receivable into cash flows from sales.

- By December 31, 2021, the cash conversion cycle had increased to 148.67 days, suggesting a longer timeframe for the company to complete the cash conversion process.

- The trend continued with a further increase to 152.10 days by December 31, 2022, indicating potential challenges in efficiently managing working capital and cash flows.

- In the following year, the cash conversion cycle saw a decline to 136.50 days by December 31, 2023, potentially reflecting improvements in inventory management or receivables collection.

- As of December 31, 2024, the cash conversion cycle decreased further to 127.73 days, potentially showcasing enhanced efficiency in working capital management and cash flow generation strategies.

Overall, monitoring the cash conversion cycle is crucial for Middleby Corp to optimize its working capital management, improve liquidity, and streamline operations for sustainable growth.