PHINIA Inc. (PHIN)

Based on the provided data for PHINIA Inc., let's analyze the liquidity ratios:

1. Current Ratio:
- The current ratio is a measure of a company's ability to cover its short-term liabilities with its short-term assets. PHINIA Inc.'s current ratio has been relatively stable over the year, ranging from 1.71 to 1.93, indicating that the company has $1.71 to $1.93 in current assets for every dollar of current liabilities. A current ratio above 1 generally suggests that the company is capable of meeting its short-term obligations.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. PHINIA Inc.'s quick ratio has also remained fairly consistent, ranging from 1.20 to 1.44 over the year. This indicates that the company has $1.20 to $1.44 in liquid assets for every dollar of current liabilities, excluding inventory.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, measuring a company's ability to cover its current liabilities with its cash and cash equivalents alone. PHINIA Inc.'s cash ratio has shown an improvement over the year, increasing from 0.29 to 0.50. This suggests that the company had $0.29 to $0.50 in cash for every dollar of current liabilities, which indicates an increased ability to meet short-term obligations using cash reserves alone.

Overall, based on the liquidity ratios analyzed, PHINIA Inc. appears to have maintained a healthy liquidity position throughout the year, with the ability to meet its short-term obligations using various levels of liquid assets. It is noteworthy that while the current and quick ratios indicate good liquidity levels, the increasing cash ratio demonstrates an enhanced capacity to meet immediate payment requirements with cash on hand, showcasing a positive liquidity trend within the company.

---

Additional liquidity measure

The cash conversion cycle of PHINIA Inc. has shown a decreasing trend over the course of the year 2024. On March 31, 2024, the cash conversion cycle was 89.92 days, indicating that it took the company approximately 89.92 days to convert its investments in inventory and other resources back into cash flows. By September 30, 2024, this cycle decreased to 83.58 days, reflecting an improvement in the efficiency of the company's working capital management.

Furthermore, by the end of the year, on December 31, 2024, the cash conversion cycle continued to decrease to 77.21 days, signaling that the company was able to more efficiently manage its cash flow and working capital components. This reduction in the cash conversion cycle suggests that PHINIA Inc. was able to optimize its operations to generate cash more quickly, possibly through better inventory management, faster collection of receivables, or extended payment terms with suppliers.

Overall, the decreasing trend in PHINIA Inc.'s cash conversion cycle throughout 2024 indicates a positive development in the company's working capital management efficiency and its ability to convert its resources into cash flows in a more timely manner.