Roper Technologies Inc. Common Stock (ROP)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.50 | 0.67 | 0.78 | 0.72 | 0.83 |
| Quick ratio | 0.39 | 0.56 | 0.41 | 0.58 | 0.70 |
| Cash ratio | 0.07 | 0.27 | 0.11 | 0.13 | 0.30 |
In analyzing the liquidity ratios of Roper Technologies Inc over the past five years, we observe the following trends:
1. Current Ratio:
- The current ratio has been declining steadily from 0.83 in 2019 to 0.50 in 2023.
- This ratio indicates that the company's current assets are not sufficient to cover its current liabilities efficiently.
- A current ratio below 1 may suggest potential liquidity challenges for the company, as it may struggle to meet its short-term obligations.
2. Quick Ratio:
- The quick ratio also shows a downward trend, decreasing from 0.75 in 2019 to 0.46 in 2023.
- This ratio excludes inventory from current assets, providing a more stringent measure of liquidity.
- The decreasing quick ratio further highlights the company's potential difficulties in meeting its short-term obligations without relying on inventory.
3. Cash Ratio:
- The cash ratio displays significant fluctuations over the years, ranging from 0.13 in 2023 to 0.34 in 2019.
- This ratio indicates the proportion of current liabilities that can be covered by cash alone.
- The sharp decline in the cash ratio in recent years raises concerns about the company's ability to depend on its cash reserves to meet short-term obligations.
In summary, the liquidity ratios of Roper Technologies Inc suggest a deteriorating liquidity position over the past five years. The downward trends in the current ratio, quick ratio, and cash ratio indicate potential challenges in meeting short-term obligations solely from current assets and cash reserves. It is essential for the company to closely monitor its liquidity position and consider strategies to improve its short-term financial health.
See also:
Roper Technologies Inc. Common Stock Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 78.46 | 80.54 | 88.29 | 96.36 | 83.70 |
The cash conversion cycle of Roper Technologies Inc has shown fluctuations over the past five years. The trend indicates an improvement in efficiency, as the cycle decreased from 74.46 days in 2019 to 53.38 days in 2023. This suggests that Roper Technologies has been able to manage its cash flow more effectively and reduce the time it takes to convert its investments in inventory into cash receipts from sales.
A shorter cash conversion cycle implies that the company is able to optimize its operations, convert its resources into sales, and collect cash more quickly. This can be beneficial for working capital management and overall financial health. However, it is important to consider the industry norms and compare Roper Technologies' performance with its peers to gain a better perspective on its efficiency in managing cash conversion cycle.
Overall, the decreasing trend in the cash conversion cycle of Roper Technologies Inc is a positive sign indicating improved operational efficiency and effective management of working capital.