Materion Corporation (MTRN)

Materion Corporation's liquidity ratios indicate a fluctuating trend over the years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, decreased from 3.66 in 2020 to 2.78 in 2023 before slightly increasing to 3.19 in 2024. This suggests that while the company has a strong liquidity position, there was a temporary decline in 2023.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also followed a declining trend from 1.52 in 2020 to 0.82 in 2023, with a slight improvement to 0.93 in 2024. This indicates that Materion may have faced challenges in quickly meeting its short-term obligations without relying on inventory.

Furthermore, the cash ratio, which assesses the company's ability to cover its current liabilities with cash and cash equivalents, remained low and constant at 0.07 from 2021 to 2024. This suggests that Materion may have limited liquid cash resources available to meet its immediate liabilities.

Overall, Materion Corporation's liquidity ratios reflect a mixed performance, with the current and quick ratios showing some fluctuations over the years while the cash ratio remains consistently low. The company may need to monitor its liquidity position closely and consider strategies to maintain a healthy balance between its current assets and liabilities.

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Additional liquidity measure

The cash conversion cycle of Materion Corporation has shown some fluctuations over the past five years. In 2020, the company's cash conversion cycle was 113.22 days, indicating that it took approximately 113 days on average to convert its investments in inventory back into cash through sales.

The cycle increased to 125.51 days by the end of 2021, suggesting a lengthening of the time needed to convert inventory into cash. This increase may reflect challenges in managing inventory levels or delays in collecting receivables.

In 2022, there was a slight improvement as the cash conversion cycle decreased to 116.70 days, indicating that Materion Corporation was able to shorten the time taken to convert inventory and receivables into cash. However, by the end of 2023, the cycle had increased slightly to 119.79 days, indicating a reversal in the positive trend observed in the previous year.

By the end of 2024, the cash conversion cycle remained relatively stable at 119.14 days. Although there was no significant change compared to the previous year, it is essential for Materion Corporation to monitor its cash conversion cycle closely to ensure efficient management of working capital and cash flow. A lower cash conversion cycle generally indicates better efficiency in managing inventory and receivables, leading to improved liquidity and potentially higher profitability.