National HealthCare Corporation (NHC)

Based on the data provided for National Healthcare Corp., the liquidity ratios have shown some fluctuations over the past five years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been healthy, ranging from 1.79 in 2022 to 1.89 in 2023. This indicates that National Healthcare Corp. has sufficient current assets to meet its short-term obligations.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Similarly to the current ratio, the quick ratio has remained relatively stable over the years, with a range from 1.37 in 2021 to 1.59 in 2023. This suggests that the company has a strong ability to meet its short-term liabilities without relying on inventory.

The cash ratio, which is the most conservative liquidity ratio, focuses solely on the company's cash and cash equivalents to cover its current liabilities. National Healthcare Corp.'s cash ratio has fluctuated over the years, with a low of 0.97 in 2022 and a high of 1.16 in 2020. The company's cash ratio in 2023 stands at 1.08, indicating that it has improved its ability to cover short-term obligations with cash on hand.

Overall, based on these liquidity ratios, National Healthcare Corp. appears to have maintained a solid liquidity position over the years, with sufficient assets to meet its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle for National Healthcare Corp. over the past five years has ranged from 33.81 days to 35.62 days. This metric measures the amount of time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

A decreasing trend in the cash conversion cycle over the years indicates that the company has been able to more efficiently manage its working capital, leading to quicker turnover of inventory and collections from customers. This can be a positive sign of effective inventory management and efficient accounts receivable collection processes.

However, fluctuations in the cash conversion cycle can also be influenced by various factors such as changes in sales volumes, inventory levels, and payment terms with suppliers and customers. It is important for the company to closely monitor and manage its cash conversion cycle to ensure optimal working capital management and liquidity.