Mettler-Toledo International Inc (MTD)
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 | 1.04 | 1.12 | 1.24 | 1.28 | 1.20 | 1.13 | 1.18 | 1.20 | 1.11 | 1.24 | 1.25 | 1.28 | 1.26 | 1.37 | 1.41 | 1.77 | 1.47 | 1.34 | 1.39 | 1.37 |
| Quick ratio | 0.62 | 0.66 | 0.73 | 0.73 | 0.70 | 0.63 | 0.66 | 0.68 | 0.65 | 0.79 | 0.79 | 0.81 | 0.82 | 0.88 | 0.88 | 1.24 | 1.03 | 0.87 | 0.88 | 0.87 |
| Cash ratio | 0.06 | 0.07 | 0.08 | 0.09 | 0.08 | 0.10 | 0.10 | 0.11 | 0.09 | 0.18 | 0.15 | 0.13 | 0.11 | 0.20 | 0.18 | 0.48 | 0.28 | 0.17 | 0.18 | 0.18 |
Mettler-Toledo International, Inc.'s liquidity ratios have shown fluctuations over the past eight quarters. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has been relatively stable, ranging from 1.04 to 1.28. While the current ratio has generally been above 1, indicating the company can meet its short-term liabilities, it has dipped below 1 in Q4 2023, raising concerns about potential liquidity issues.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also displayed variability, fluctuating between 0.71 and 0.86. The downward trend seen in the quick ratio suggests that Mettler-Toledo may have difficulties meeting its immediate obligations without relying on inventory, which could be a point of attention for the company's management.
Furthermore, the cash ratio, indicating the proportion of current liabilities that can be covered by cash and cash equivalents, has shown a gradual decline from 0.15 to 0.22. While the cash ratio remains below 1, signaling potential liquidity challenges, the downward trajectory raises concerns about the company's ability to cover short-term obligations with available cash resources alone.
Overall, Mettler-Toledo International, Inc.'s liquidity ratios indicate fluctuations and potential liquidity challenges, particularly evident in the decreasing trend of the quick and cash ratios. Management may need to focus on improving cash management and liquidity to ensure the company's ability to 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 | 105.36 | 105.65 | 110.84 | 115.80 | 108.89 | 107.96 | 103.52 | 102.08 | 96.98 | 100.44 | 98.46 | 100.62 | 104.87 | 106.18 | 103.55 | 99.61 | 94.24 | 99.98 | 97.89 | 91.67 |
The cash conversion cycle measures how efficiently a company manages its working capital by evaluating the time it takes to convert its investments in inventory and accounts receivable into cash. Looking at the data provided for Mettler-Toledo International, Inc. over the last eight quarters, we can see fluctuations in the cash conversion cycle.
The company's cash conversion cycle has been ranging between 102.08 to 115.80 days over the past two years. A lower cash conversion cycle indicates that the company is able to efficiently manage its working capital, while a higher cycle suggests inefficiencies.
During Q2 and Q3 of 2022, we observe the lowest cash conversion cycle figures of 103.52 and 102.08 days, respectively, which may indicate effective management of inventory and accounts receivable during those periods. In contrast, the company experienced a peak in the cash conversion cycle in Q1 2023, reaching 115.80 days, suggesting potential delays in converting investments into cash during this quarter.
Overall, while there have been fluctuations in Mettler-Toledo International, Inc.'s cash conversion cycle over the analyzed period, a downward trend would signify an improvement in the company's operational efficiency and working capital management. Monitoring and analyzing this metric can provide valuable insights into the company's financial health and effectiveness in managing its resources.