Enpro Industries (NPO)

Enpro Inc's liquidity ratios have shown improvements over the past five years, indicating the company's ability to meet short-term obligations.

The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has consistently been above 1, indicating a strong ability to meet current obligations. The current ratio has shown an increasing trend from 2019 to 2023, reaching 3.31 in the most recent year. This suggests that Enpro Inc has a healthy amount of current assets relative to its current liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. Enpro Inc's quick ratio has also exhibited a positive trend over the years, indicating the company's ability to meet short-term obligations without relying on slow-moving inventories. The quick ratio increased from 1.08 in 2019 to 2.59 in 2023, reflecting a strong liquidity position.

The cash ratio, which is the most stringent measure of liquidity as it considers only cash and cash equivalents to cover current liabilities, has improved significantly over the years for Enpro Inc. The cash ratio increased from 0.57 in 2019 to 1.99 in 2023, showing a notable strengthening of the company's ability to cover its short-term obligations with cash reserves.

Overall, Enpro Inc's liquidity ratios indicate a strong financial position in terms of its ability to meet short-term obligations. The increasing trend in these ratios over the years demonstrates effective management of working capital and liquidity by the company.

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Additional liquidity measure

The cash conversion cycle of Enpro Inc has displayed fluctuations over the past five years. As of December 31, 2023, the company's cash conversion cycle stands at 82.86 days, showing a slight improvement compared to the previous year. In 2022, the cycle was 87.92 days, which was higher than the current period but lower than the cycle observed in 2021, which was 97.00 days. The cycle was closer to the current value in 2020 at 84.89 days and relatively consistent with the levels seen in 2019 at 82.54 days.

The cash conversion cycle provides insight into how efficiently a company manages its working capital, reflecting the time it takes to convert resources invested in inventory into cash flows from sales. A lower cash conversion cycle indicates that the company is able to efficiently generate cash from its operations.

Enpro Inc's slight reduction in the cash conversion cycle from 2022 to 2023 suggests potential improvements in managing inventory, collecting receivables, and paying its payables. It will be important for the company to continue monitoring and optimizing its cash conversion cycle in the future to maintain efficient working capital management.