Myers Industries Inc (MYE)

Myers Industries Inc.'s liquidity ratios provide insights into the company's ability to meet its short-term financial obligations. The current ratio, which reflects the company's ability to cover its short-term liabilities with its current assets, has shown some fluctuations over the past five years. In 2023, the current ratio decreased to 1.55 from 1.87 in 2022, indicating a slight decrease in the company's ability to cover its short-term liabilities with current assets.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also experienced fluctuations over the years. In 2023, the quick ratio decreased to 1.00 from 1.19 in 2022, suggesting a reduction in the company's ability to cover its current liabilities with its most liquid assets.

The cash ratio, which measures the company's ability to cover its short-term obligations with its cash and cash equivalents alone, has shown significant variability. In 2023, the cash ratio remained stable at 0.22, possibly indicating that the company maintains a consistent level of cash relative to its current liabilities.

Overall, while the company's liquidity ratios have fluctuated over the past five years, Myers Industries Inc. generally maintains a moderate level of liquidity, as indicated by its current, quick, and cash ratios. However, the decreasing trend in the current and quick ratios may warrant further monitoring to ensure the company's continued ability to meet its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle of Myers Industries Inc. has shown variability over the past five years, ranging from a low of 41.42 days in 2019 to a high of 65.99 days in 2022. The cycle measures the average number of days it takes for the company to convert its investments in inventory and other resources into cash from sales, and then back into cash by settling its accounts payable.

In 2021, the company saw a decrease in its cash conversion cycle to 57.34 days, indicating an improvement in efficiency in managing its working capital compared to the previous year. However, this improvement was not sustained, as the cycle increased again in 2022 to 65.99 days.

It is worth noting that a shorter cash conversion cycle is generally desirable as it indicates that the company is able to manage its cash flow effectively and efficiently. Conversely, a longer cash conversion cycle may suggest inefficiencies in the company's operations or challenges in collecting receivables and managing inventory.

Overall, Myers Industries Inc. should continue to monitor and analyze its cash conversion cycle to identify areas for improvement and implement strategies to enhance its working capital management and cash flow efficiency going forward.