Nu Skin Enterprises Inc (NUS)

Over the past five years, Nu Skin Enterprises, Inc. has maintained relatively stable current ratios, ranging from 1.65 to 2.13. The current ratio measures the company's ability to cover its short-term liabilities with its current assets. A current ratio above 1 indicates the company has sufficient current assets to cover its current liabilities. Nu Skin Enterprises, Inc.'s current ratios have been consistently above 1, indicating good liquidity and the ability to meet short-term obligations.

In terms of quick ratios, the company has shown fluctuations, with the ratio ranging from 0.89 to 1.28 over the same period. The quick ratio is a more stringent measure of liquidity as it excludes inventory from current assets. A quick ratio above 1 suggests that Nu Skin Enterprises, Inc. can meet its short-term obligations without relying on selling inventory. Although the quick ratios have been somewhat volatile, they have generally remained above 1, indicating a reasonable level of liquidity.

The cash ratio, which measures a company's ability to cover its current liabilities with cash and cash equivalents, has also shown variations for Nu Skin Enterprises, Inc. ranging from 0.82 to 1.06. A cash ratio above 1 signifies that the company holds more cash than its short-term liabilities. Despite some fluctuations, the company has maintained cash ratios above 1 in most years, indicating a strong position in terms of cash liquidity.

Overall, based on the liquidity ratios analyzed, Nu Skin Enterprises, Inc. appears to have maintained a solid liquidity position over the past five years, consistently demonstrating the ability to meet short-term obligations.

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Additional liquidity measure

The cash conversion cycle of Nu Skin Enterprises, Inc. has exhibited fluctuating trends over the past five years. In 2023, the company's cash conversion cycle decreased to 154.58 days from 176.82 days in 2022, indicating an improvement in its efficiency in managing cash flows. This suggests that Nu Skin Enterprises was able to reduce the time taken to convert its investments in inventory and accounts receivable into cash.

However, compared to 2020, where the cash conversion cycle was 146.63 days, the company experienced a slight increase in 2023. This may indicate potential challenges in managing working capital efficiently during the reported period.

When considering the longer-term trend, Nu Skin Enterprises' cash conversion cycle has shown variability, with 2021 being the highest at 194.76 days and 2020 being the lowest at 146.63 days. The fluctuation in the cash conversion cycle over the years suggests that the company may need to focus on maintaining consistency in managing its cash flow processes to ensure optimal efficiency.

Overall, while Nu Skin Enterprises has shown improvement in its cash conversion cycle in 2023 compared to the previous year, ongoing monitoring and evaluation of working capital management practices may be necessary to sustain and improve operational efficiency in the future.