Olin Corporation (OLN)

The current ratio for Olin Corporation has shown fluctuations over the past few years, ranging from a low of 1.11 in March 2020 to a high of 1.75 in June 2020. The ratio has generally been above 1, indicating that the company has had sufficient current assets to cover its current liabilities. However, the ratio has trended downward in recent periods, with a decrease to 1.27 by December 2024, possibly indicating a tighter liquidity position.

The quick ratio, which excludes inventory from current assets, has also varied for Olin Corporation. It has generally been low, indicating a lower ability to cover current liabilities with its most liquid assets. The ratio has fluctuated between 0.10 and 0.27 over the period analyzed, with a recent decrease to 0.11 by December 2024, signaling potential liquidity challenges.

The cash ratio, which is the most conservative liquidity measure, has followed a similar trend to the quick ratio for Olin Corporation. It has ranged from 0.10 to 0.27, with a decrease to 0.11 by December 2024. This indicates that Olin Corporation may have limited ability to cover its current liabilities with cash alone.

Overall, the liquidity ratios for Olin Corporation suggest a potential liquidity strain, especially as the current ratio, quick ratio, and cash ratio have declined or remained low in recent periods. This may warrant further monitoring to ensure the company can meet its short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Olin Corporation has shown some fluctuations over the past few years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 42.80 days on September 30, 2020, to a high of 62.94 days on June 30, 2023. Generally, a shorter cash conversion cycle is desirable as it indicates that a company is efficiently managing its working capital.

Olin Corporation experienced an upward trend in the cash conversion cycle from 2020 to 2023, showing an increase from 44.57 days on March 31, 2020, to 62.94 days on June 30, 2023. However, there was a notable improvement in the cycle by the end of 2024, with a decrease to 51.63 days on December 31, 2024.

Analyzing the changes in the cash conversion cycle can provide insights into the company's efficiency in managing its inventories, receivables, and payables. It is essential for Olin Corporation to monitor and potentially optimize its cash conversion cycle to ensure effective working capital management and maximize cash flow efficiency.