Enviri Corporation (NVRI)

The liquidity ratios of Enviri Corp, specifically the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term obligations.

The current ratio has been gradually decreasing over the past five years, from 1.40 in 2019 to 1.26 in 2023. This ratio indicates that for every dollar of current liabilities, the company has $1.26 of current assets available to cover those obligations. While the current ratio above 1 suggests that Enviri has sufficient current assets to meet short-term liabilities, the decreasing trend suggests a potential weakening liquidity position.

The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets. Enviri Corp's quick ratio has shown fluctuations over the years, reaching a low of 0.70 in 2022 and a high of 1.19 in 2020. The quick ratio below 1 for most years indicates that the company may have difficulty meeting its short-term obligations without relying on inventory sales.

The cash ratio, the most conservative liquidity ratio, measures the company's ability to cover its current liabilities with its cash and cash equivalents alone. The trend in Enviri's cash ratio has been inconsistent, with fluctuations from 0.21 in 2021 to 0.37 in 2020. A cash ratio below 1 signifies that Enviri may not have enough cash on hand to cover its current liabilities entirely.

Overall, Enviri Corp's liquidity ratios suggest that while the company has generally maintained a level of liquidity to cover its short-term obligations, there is a slight downward trend in liquidity over the years. It would be prudent for Enviri to monitor its liquidity position closely and potentially implement strategies to strengthen its short-term financial position.

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Additional liquidity measure

The cash conversion cycle of Enviri Corp has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 30.41 days from 26.81 days in 2022. This indicates that the company is managing its working capital more efficiently, with a shorter period required to convert inventory and receivables into cash.

Comparing the current cycle to previous years, it is notable that Enviri Corp has made significant improvements since 2020 when the cycle was 75.54 days. This trend suggests that the company has been successful in streamlining its operations and managing its inventory, accounts receivable, and accounts payable more effectively.

Overall, Enviri Corp's decreasing cash conversion cycle indicates improved liquidity and operational efficiency, which can lead to better financial performance and sustainable growth in the future.