Olin Corporation (OLN)

Olin Corp.'s liquidity ratios have shown a decreasing trend over the last five years. The current ratio, which measures the company's short-term liquidity and ability to meet its current liabilities with current assets, has decreased from 1.58 in 2019 to 1.29 in 2023. This indicates a slight weakening in Olin Corp.'s ability to cover its short-term obligations.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also declined from 0.94 in 2019 to 0.73 in 2023. This suggests that Olin Corp. may have a reduced ability to meet its short-term obligations with its most liquid assets.

Furthermore, the cash ratio, which provides the most conservative measure of liquidity by looking at the ability to cover current liabilities with cash and cash equivalents only, has decreased from 0.23 in 2019 to 0.15 in 2023. This signifies a decrease in the company's ability to pay off its current liabilities using only its cash resources.

Overall, the declining trend in Olin Corp.'s liquidity ratios may raise concerns about the company's short-term financial health and its ability to meet its obligations as they come due. It is important for stakeholders to monitor these ratios closely and understand the factors contributing to these deteriorations in liquidity over time.

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Additional liquidity measure

The cash conversion cycle of Olin Corp. has fluctuated over the past five years, indicating variations in its efficiency in managing its working capital. A lower cash conversion cycle is generally preferable as it signifies faster conversion of inventory and receivables into cash.

In 2023, the cash conversion cycle increased to 52.91 days from 42.96 days in 2022, indicating a potential slowdown in the company's ability to convert its resources into cash. Despite the increase, the cycle remained relatively higher compared to previous years, suggesting a possible need for improved working capital management.

In 2021 and 2020, the cash conversion cycle had decreased to 46.47 days and 46.12 days respectively, reflecting a more efficient conversion of inventory and receivables into cash during those years. This improvement in efficiency could have positively impacted the company's liquidity and cash flow.

In 2019, the cash conversion cycle was 49.19 days, suggesting a longer time taken to convert resources into cash compared to the following years. This may have put pressure on the company's cash flow and liquidity position during that period.

Overall, Olin Corp. should monitor its cash conversion cycle closely to identify areas for improvement in working capital management and strive for consistency in converting inventory and receivables into cash efficiently.