Nucor Corp (NUE)

### Nucor Corp. Liquidity Ratios Analysis:

#### Current Ratio:
- The current ratio measures Nucor Corp.'s ability to cover short-term liabilities with its current assets.
- Nucor's current ratio has been relatively stable over the past five years, ranging from 2.48 to 3.61.
- A current ratio above 1 indicates that Nucor Corp. has more current assets than current liabilities, which is a positive sign.
- The current ratio peaked in 2020 and 2023, suggesting a stronger liquidity position during those years.

#### Quick Ratio:
- The quick ratio assesses Nucor's ability to meet short-term obligations with its most liquid assets.
- Nucor's quick ratio has also shown consistency, fluctuating between 1.32 and 2.35 over the last five years.
- This ratio indicates that Nucor has a sufficient level of liquid assets to cover immediate liabilities.
- The quick ratio has improved gradually, with the highest value recorded in 2023, signifying a stronger short-term liquidity position.

#### Cash Ratio:
- The cash ratio evaluates Nucor's ability to settle current liabilities using its cash and cash equivalents.
- Nucor's cash ratio has depicted an upward trend, starting from 0.57 in 2021 and reaching 1.71 in 2023.
- The rising cash ratio implies that Nucor has increased its cash reserves in relation to its current liabilities.
- A cash ratio above 1 suggests that Nucor can repay all its current liabilities using only cash on hand, highlighting a sound liquidity position.

#### Overall Assessment:
- Nucor Corp.'s liquidity ratios exhibit a strong liquidity position over the past five years.
- The company has maintained healthy liquidity levels, with improvements seen in the quick ratio and cash ratio.
- The current, quick, and cash ratios consistently indicate that Nucor has adequate liquidity to meet its short-term obligations, thereby ensuring financial stability and operational continuity.

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Additional liquidity measure

The cash conversion cycle of Nucor Corp. has fluctuated over the past five years, indicating changes in the efficiency of managing its working capital. In 2021, the company's cash conversion cycle was relatively high at 96.44 days, suggesting a longer period between spending cash on inventory and receiving cash from the sale of goods. This may have impacted the company's liquidity and operational efficiency.

However, in the subsequent years, Nucor Corp. was able to improve its cash conversion cycle, with 2023 displaying a cycle of 79.33 days, close to the levels seen in 2019 and 2020. This reduction is a positive sign as it indicates the company has optimized its cash flow management processes, potentially improving its ability to generate cash and fund its operations.

Overall, the trend in Nucor Corp.'s cash conversion cycle reflects efforts to enhance operational efficiency and manage working capital effectively in recent years, leading to a more streamlined cash flow cycle.