Nordson Corporation (NDSN)

Liquidity ratios

	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Current ratio	2.41	2.36	2.21	2.19	2.11	2.23	1.17	1.43	1.36	1.35	1.47	2.45	2.62	2.49	2.46	2.86	2.81	3.11	3.17	2.71
Quick ratio	1.34	1.36	1.22	1.22	1.25	1.28	0.66	0.81	0.84	0.80	0.86	1.48	1.77	1.64	1.57	1.89	1.87	2.07	2.17	1.71
Cash ratio	0.22	0.32	0.23	0.25	0.23	0.27	0.13	0.15	0.20	0.16	0.17	0.40	0.67	0.41	0.35	0.63	0.57	0.64	0.85	0.34

Nordson Corporation's liquidity ratios have shown fluctuating trends over the past few quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 2, indicating a strong liquidity position. However, there was a significant drop in the current ratio in the April 30, 2023 quarter, raising concerns about the company's short-term liquidity at that time.

The quick ratio, which is a more stringent measure of liquidity that excludes inventory from current assets, also demonstrates variability but has generally been above 1. This suggests that Nordson can meet its short-term obligations without relying heavily on inventory liquidation.

The cash ratio, which shows the company's ability to cover its current liabilities with only cash and cash equivalents, has been lower compared to the current and quick ratios. While the cash ratio also displays fluctuations, it has generally been above 0.2, indicating that Nordson has a reasonable level of cash reserves to handle short-term obligations.

Overall, the liquidity ratios suggest that Nordson Corporation has maintained a fairly strong liquidity position, although there have been periods of lower liquidity that warrant close monitoring to ensure the company can meet its short-term financial commitments.

Additional liquidity measure

		Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Cash conversion cycle	days	147.89	135.74	136.04	138.46	146.84	137.71	140.02	144.36	129.70	135.86	129.80	123.76	124.09	123.15	120.18	119.62	123.16	135.24	129.16	124.31

The cash conversion cycle for Nordson Corporation has fluctuated over the past few years, ranging from 119.62 days to 147.89 days. The cash conversion cycle indicates how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

In general, a longer cash conversion cycle signifies that the company takes a longer time to turn its investments into cash, which can indicate inefficiencies in managing working capital. Conversely, a shorter cycle implies that the company has a faster turnover of resources, leading to quicker cash inflows.

Examining the trend, there seems to be some variation in the cash conversion cycle over the periods analyzed. However, the trend does not show a clear pattern of improvement or deterioration over time. It's important for Nordson Corporation to monitor and manage its cash conversion cycle efficiently to optimize working capital management and enhance overall financial performance.