Organon & Co (OGN)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.60 | 1.70 | 1.64 | 1.65 | 1.54 | 1.63 | 1.66 | 1.61 | 1.56 | 1.54 | 1.58 | 1.61 | 1.45 | 1.38 | 1.31 | 1.04 | 2.86 |
| Quick ratio | 0.25 | 0.00 | 0.26 | 0.23 | 0.24 | 0.17 | 0.14 | 0.20 | 0.28 | 0.21 | 0.23 | 0.30 | 0.28 | 0.32 | 0.25 | 0.05 | 0.42 |
| Cash ratio | 0.25 | 0.00 | 0.26 | 0.23 | 0.24 | 0.17 | 0.14 | 0.20 | 0.28 | 0.21 | 0.23 | 0.30 | 0.28 | 0.32 | 0.25 | 0.05 | 0.42 |
The current ratio of Organon & Co has been fairly stable over the analysed period, ranging from 1.04 to 1.70. This indicates that the company has generally been able to cover its short-term obligations with its current assets.
On the other hand, the quick ratio, which excludes inventory from current assets, shows a wider fluctuation from 0.00 to 0.32. This suggests that the company may have some difficulty in meeting its short-term liabilities using only its most liquid assets.
The cash ratio, which is the most stringent liquidity ratio as it only considers cash and cash equivalents, also displays fluctuations from 0.00 to 0.42. This ratio indicates the company's ability to pay off its current liabilities with its most liquid assets immediately.
Overall, the liquidity ratios of Organon & Co show some variability over time, with the current ratio indicating a more favorable liquidity position compared to the quick ratio and cash ratio, which show a more conservative view of the company's ability to meet short-term obligations.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 179.38 | 188.71 | 178.75 | 177.31 | 190.84 | 178.44 | 185.05 | 176.90 | 159.59 | 139.55 | 147.11 | 146.81 | 140.21 | 93.15 | 90.24 | 99.19 | 99.57 |
The cash conversion cycle is a crucial metric that measures how efficiently a company manages its working capital by evaluating the time it takes for a company to convert its investments in inventory and receivables into cash flows from sales.
Analyzing the data provided for Organon & Co, we observe fluctuations in the cash conversion cycle over the periods indicated. Generally, a shorter cash conversion cycle is preferable as it indicates that the company is able to quickly convert its inventory and receivables into cash, thus improving liquidity and reducing the need for external financing.
From December 31, 2020, to December 31, 2024, we note a fluctuation in the cash conversion cycle, starting at 99.57 days and peaking at 190.84 days. This indicates that Organon & Co experienced challenges in managing its working capital efficiently. A peak in the cash conversion cycle suggests that the company may have faced difficulties in collecting receivables or managing inventory levels, which could impact its cash flow and liquidity position.
It is essential for Organon & Co to closely monitor and manage its cash conversion cycle to ensure optimal working capital management. Strategies to improve the cash conversion cycle may include streamlining inventory management, optimizing accounts receivable processes, and negotiating favorable payment terms with suppliers and customers.
In conclusion, the trend in Organon & Co's cash conversion cycle shows fluctuations over the periods analyzed, underlining the importance for the company to focus on improving working capital efficiency to enhance its overall financial performance and liquidity position.