Envista Holdings Corp (NVST)

Envista Holdings Corp's liquidity ratios have shown fluctuations over the last five years:

1. Current ratio:
- The current ratio measures the company's ability to meet its short-term obligations with its current assets.
- Envista's current ratio has generally been above 1 over the past five years, indicating that it has had sufficient current assets to cover its current liabilities.
- However, the current ratio has varied significantly, with a notable improvement in 2023 compared to 2022.
- The current ratio of 2.23 in 2023 reflects a stronger liquidity position compared to previous years.

2. Quick ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets.
- Similar to the current ratio, Envista's quick ratio has fluctuated over the years but has generally improved from 2019 to 2023.
- The quick ratio of 1.90 in 2023 indicates that Envista has a strong ability to meet its short-term obligations without relying on inventory.

3. Cash ratio:
- The cash ratio is the most conservative liquidity ratio, focusing solely on the company's ability to cover its current liabilities with cash and cash equivalents.
- Envista's cash ratio has also shown variability over the years, with a substantial improvement in 2023 compared to 2022.
- The cash ratio of 1.38 in 2023 suggests that Envista has increased its cash position relative to its current liabilities, enhancing its liquidity and financial flexibility.

Overall, Envista Holdings Corp has demonstrated an improvement in its liquidity position, as evidenced by the increasing trend in its current, quick, and cash ratios from 2019 to 2023. This indicates that the company has been more effective in managing its short-term obligations and maintaining sufficient liquid assets to support its operations.

---

Additional liquidity measure

The cash conversion cycle of Envista Holdings Corp has shown a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle increased to 83.66 days from 80.09 days in 2022. This indicates that, on average, it took longer for Envista Holdings Corp to convert its investments in inventory and receivables into cash during the year.

Looking back, the cash conversion cycle was at its lowest in 2020, standing at 68.07 days, suggesting that the company was more efficient in managing its cash during that period. However, there was a significant uptick in 2021, with the cash conversion cycle increasing to 74.59 days before rising further in 2023.

Overall, the increasing trend in the cash conversion cycle indicates potential challenges in managing working capital efficiently. Envista Holdings Corp may need to focus on optimizing inventory levels, improving receivables collection, and managing payables effectively to shorten the cash conversion cycle and enhance liquidity and operational efficiency.