Owens & Minor Inc (OMI)

Owens & Minor Inc's liquidity ratios provide insights into the company's ability to meet short-term obligations and manage its current liabilities.

1. Current Ratio: Owens & Minor Inc's current ratio has fluctuated over the years, indicating the company's ability to cover its short-term obligations with its current assets. The current ratio was 1.59 in 2020, indicating that the company had $1.59 in current assets for every $1 in current liabilities. The ratio improved to 1.73 in 2021 but then decreased significantly to 1.47 in 2022 and further to 1.11 in 2023, potentially indicating potential liquidity challenges. By 2024, the current ratio dropped significantly to 0.03, highlighting a concerning liquidity position where current assets are significantly lower than current liabilities.

2. Quick Ratio: The quick ratio measures the company's ability to meet short-term obligations with its most liquid assets. Owens & Minor Inc's quick ratio has been consistently low over the years, indicating potential liquidity issues. The quick ratio was 0.06 in 2020 and 0.04 in 2021 and 2022. In 2023, the quick ratio improved slightly to 0.13, suggesting a better ability to cover short-term obligations without relying on inventory. However, by 2024, the quick ratio declined back to 0.03, indicating a significant liquidity strain.

3. Cash Ratio: The cash ratio specifically focuses on the company's ability to cover its short-term obligations with cash and cash equivalents. Owens & Minor Inc's cash ratio has also been consistently low across the years, with the ratio being 0.06 in 2020, 0.04 in 2021 and 2022, and 0.13 in 2023. However, by 2024, the cash ratio dropped back to 0.03, highlighting potential challenges in meeting immediate cash needs.

Overall, the declining trend in liquidity ratios, particularly the sharp drop in the current ratio and quick ratio in 2024, raises concerns about Owens & Minor Inc's short-term liquidity position and ability to meet its financial obligations promptly. Further analysis of the company's cash management and working capital practices may be necessary to address these liquidity challenges.

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Additional liquidity measure

Owens & Minor Inc's cash conversion cycle has shown a fluctuating trend over the years. The cycle was 62.55 days as of December 31, 2020, which increased to 66.01 days by December 31, 2021. However, there was a subsequent improvement as the cycle decreased to 59.88 days by December 31, 2022. This trend continued positively with further reduction to 49.38 days by December 31, 2023, and even more significantly down to 38.61 days by December 31, 2024.

A decreasing cash conversion cycle indicates that Owens & Minor Inc is efficiently managing its working capital and converting its inventory and receivables into cash more swiftly. This trend suggests improved liquidity and operational efficiency, allowing the company to fund its operations more effectively. Overall, the company's ability to convert its resources into cash has shown positive progress in recent years.