Envista Holdings Corp (NVST)

The liquidity ratios of Envista Holdings Corp, as depicted by the data provided, show varying levels of liquidity over the years.

1. Current Ratio:
- The current ratio indicates the ability of the company to cover its short-term obligations with its current assets.
- The trend shows that the current ratio increased from 0.94 in 2020 to 2.04 in 2024.
- A current ratio above 1 suggests that the company has more current assets than current liabilities, indicating improved liquidity over the years.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets.
- The trend in this ratio shows an increase from 0.74 in 2020 to 1.63 in 2024.
- This demonstrates an improvement in the company's ability to meet short-term obligations without relying on selling inventory.

3. Cash Ratio:
- The cash ratio focuses solely on the ability of the company to cover its current liabilities with cash and cash equivalents.
- Envista Holdings Corp's cash ratio increased from 0.53 in 2020 to 1.22 in 2024.
- The upward trend indicates a strengthening liquidity position as the company holds more cash to cover immediate payment obligations.

Overall, the liquidity ratios of Envista Holdings Corp have shown a positive trend over the years, reflecting an improvement in its ability to meet short-term obligations and indicating a strengthened liquidity position.

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Additional liquidity measure

The cash conversion cycle of Envista Holdings Corp has seen fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle was 60.33 days, indicating a relatively efficient management of cash flow from operations. However, there was an increase in the cash conversion cycle to 74.59 days by December 31, 2021, suggesting a longer time period between the company's investment in inventory and the receipt of cash from sales.

Subsequently, there was a further increase to 80.09 days by December 31, 2022, and a continued rise to 83.66 days by December 31, 2023, indicating potential challenges in managing working capital effectively. However, by December 31, 2024, the cash conversion cycle decreased to 59.52 days, showing a potential improvement in the company's ability to convert its investments in inventory back into cash.

Overall, fluctuations in the cash conversion cycle of Envista Holdings Corp suggest varying efficiency levels in managing receivables, inventory, and payables over the years. Further analysis and monitoring of this metric will be essential for evaluating the company's effectiveness in optimizing cash flow and working capital management.