Nucor Corp (NUE)

Nucor Corp's liquidity ratios indicate the company's ability to meet short-term obligations. The current ratio declined from 3.61 in 2020 to 2.48 in 2021, but improved in subsequent years, reaching 3.57 in 2023. This suggests that the company had more current assets to cover its current liabilities, although the ratio decreased to 2.51 in 2024.

The quick ratio, a more stringent measure of liquidity, followed a similar trend. Starting at 1.16 in 2020, it dropped to 0.51 in 2021, but then increased to 1.55 in 2023 before decreasing to 0.83 in 2024. This indicates that Nucor may have had challenges meeting its short-term obligations in 2021 and 2024.

The cash ratio, which focuses solely on cash and cash equivalents, mirrored the quick ratio trend. It stood at 1.16 in 2020, dropped to 0.51 in 2021, improved to 1.55 in 2023, but decreased to 0.83 in 2024. Nucor's cash position may have been stronger in 2023 compared to other years.

Overall, Nucor Corp's liquidity position improved from 2021, but there was some variation in the ratios between 2023 and 2024. The company should continue monitoring and managing its liquidity effectively to ensure it can meet its short-term obligations.

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Additional liquidity measure

The cash conversion cycle (CCC) of Nucor Corp has shown some fluctuations over the past five years. In December 2020, the CCC was 72.73 days, indicating that on average, it took the company 72.73 days to convert its investments in inventory and accounts receivable into cash from sales.

By December 2021, the CCC had increased to 86.18 days, suggesting a longer time period for Nucor to convert its resources into cash. However, the company managed to improve its efficiency in December 2022, as the CCC decreased to 68.62 days, indicating a shorter turnaround time in converting resources to cash.

In December 2023, the CCC slightly increased to 75.71 days, showing a moderate impact on the company's cash conversion efficiency. The trend reversed again in December 2024, with the CCC improving to 69.98 days, indicating better management in converting assets into cash within a shorter time frame.

Overall, the fluctuations in Nucor Corp's cash conversion cycle over the five-year period suggest varying efficiency levels in managing inventory, receivables, and payables to optimize cash flow. Monitoring the CCC can help evaluate the company's liquidity and operational efficiency in converting assets into cash.