Rollins Inc (ROL)

Rollins, Inc.'s liquidity ratios over the past five years show a fluctuating trend. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has been consistently below 1, indicating potential difficulties in meeting immediate financial obligations. However, the current ratio has remained relatively stable around 0.70 on average.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Rollins, Inc.'s quick ratio has also hovered around 0.60 to 0.70, reflecting a similar liquidity position to the current ratio.

The cash ratio, which offers the most conservative measure of liquidity by considering only cash and cash equivalents, has shown some variability but generally decreased over the past five years. This ratio indicates the company's ability to cover its short-term liabilities with its most liquid assets, with the trend suggesting a potential decrease in the immediate cash coverage available.

Overall, based on the liquidity ratios provided, Rollins, Inc. may face challenges in meeting its short-term obligations, as indicated by the consistently low current and quick ratios. Additionally, the declining trend in the cash ratio suggests a potential decrease in the company's ability to cover its liabilities with its most liquid assets.

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Additional liquidity measure

Rollins, Inc.'s cash conversion cycle has exhibited fluctuations over the past five years. The trend shows a slight increase from 20.48 days in 2019 to 22.00 days in 2022, followed by a decrease to 21.64 days in 2023. The company's cash conversion cycle was relatively high in 2020 at 13.59 days, suggesting that the company managed its cash efficiently that year.

A lower cash conversion cycle indicates that Rollins, Inc. is taking less time to convert its investments in inventory and other resources into cash from sales, reflecting an efficient working capital management. Conversely, a longer cycle may indicate inefficiencies in inventory management or an increase in the time taken to collect receivables.

Overall, the trends in Rollins, Inc.'s cash conversion cycle suggest varying efficiencies in managing working capital over the years, highlighting the importance of monitoring and optimizing cash flow processes to sustain or improve operational performance.