Minerals Technologies Inc (MTX)

Minerals Technologies, Inc.'s liquidity ratios have shown some fluctuations over the past five years.

The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has varied from 2.13 in 2022 to 3.49 in 2020. The current ratio improved in 2023 to 2.40, indicating that the company may have a strong ability to cover its short-term liabilities with its current assets.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has ranged from 1.44 in 2022 to 2.66 in 2020. In 2023, the quick ratio improved to 1.69, suggesting the company's ability to meet short-term obligations without relying on inventory has strengthened.

The cash ratio, the most conservative measure of liquidity, which indicates the company's ability to cover its current liabilities with its cash and cash equivalents, has varied from 0.63 in 2022 to 1.41 in 2020. The cash ratio decreased in 2023 to 0.82, suggesting a lower ability to cover short-term obligations solely with cash and cash equivalents.

Overall, the current and quick ratios have generally been at comfortable levels over the years, indicating the company's ability to meet its short-term obligations. However, the decrease in the cash ratio in 2023 may point to a slightly reduced capacity to cover immediate liabilities with cash on hand.

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Additional liquidity measure

The cash conversion cycle of Minerals Technologies, Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle stands at 97.14 days, showing an improvement compared to the previous year's figure of 103.45 days. This indicates that the company is taking less time to convert its investments in inventory and other resources into cash.

Looking back at prior years, we see a downward trend starting from 115.11 days in 2020, reaching a peak of 103.45 days in 2022, and then a decline to 97.14 days in 2023. This trend suggests that the company has been more efficient in managing its cash flows and working capital over the last two years.

Despite the improvement in 2023, the company should continue to focus on optimizing its cash conversion cycle to ensure that it remains efficient in its operations and maintains a healthy cash position. By closely monitoring the components of the cash conversion cycle, such as the accounts receivable and accounts payable turnover, Minerals Technologies, Inc. can enhance its liquidity and overall financial performance.