Rogers Corporation (ROG)

Rogers Corporation's liquidity ratios demonstrate a strong ability to meet its short-term obligations and cover immediate financial needs. The current ratio, which measures the company's ability to pay its short-term liabilities with its current assets, has remained consistently above 3 in the past five years, ranging from 3.56 to 4.63. This indicates that Rogers Corporation has more than enough current assets to cover its current liabilities, providing a buffer for unexpected events or expenses.

Similarly, the quick ratio, also known as the acid-test ratio, reflects the company's ability to meet its short-term obligations without relying on inventory. Although the quick ratio has shown slight fluctuations over the years, ranging from 1.13 to 1.86, it generally remains above 1, suggesting that Rogers Corporation can cover its immediate liabilities with its most liquid assets.

Furthermore, the cash ratio, which focuses specifically on the company's ability to cover its current liabilities with cash and cash equivalents, has also been consistently strong, ranging from 1.13 to 1.86. This indicates that Rogers Corporation holds sufficient cash to meet its short-term obligations without relying on selling other assets or obtaining additional financing.

Overall, based on the liquidity ratios, Rogers Corporation appears to have a robust financial position with ample liquidity to navigate unforeseen challenges and meet its short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Rogers Corporation has shown fluctuations over the five-year period from December 31, 2020, to December 31, 2024. Initially, the company had a cash conversion cycle of 73.15 days in 2020, indicating that it took approximately 73 days to convert its investments in inventory and accounts receivable into cash.

However, there was a noticeable increase in the cash conversion cycle to 83.40 days in 2021, suggesting that the company took longer to convert its working capital into cash. This trend continued with a further increase to 102.40 days in 2022, reflecting challenges in efficiently managing the company's cash flow and operating cycle.

The cash conversion cycle improved slightly in 2023, decreasing to 93.18 days, although it remained above the levels seen in 2020. In 2024, the cash conversion cycle was recorded at 93.92 days, indicating a relatively stable performance compared to the previous year.

Overall, the increasing trend in the cash conversion cycle from 2020 to 2022 and the subsequent fluctuations highlight potential inefficiencies in managing the company's working capital and cash flow. It is crucial for Rogers Corporation to focus on optimizing its inventory management and accounts receivable collection processes to shorten the cash conversion cycle and improve its cash flow management in the future.