Sealed Air Corporation (SEE)

Sealed Air Corp.'s liquidity ratios have shown fluctuations over the past five years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has ranged from 1.02 to 1.38. In recent years, the current ratio has been relatively stable, with a slight increase from 1.03 in 2021 to 1.30 in 2023. This indicates that the company has improved its ability to meet its short-term obligations using its current assets.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity, as it excludes inventory from current assets. Sealed Air Corp.'s quick ratio has fluctuated between 0.60 and 0.94 over the past five years. The increase from 0.67 in 2021 to 0.79 in 2023 suggests that the company has improved its ability to meet short-term obligations without relying on inventory.

The cash ratio, which is the most conservative liquidity ratio, measures the company's ability to cover its current liabilities with its cash and cash equivalents. Sealed Air Corp.'s cash ratio has ranged from 0.22 to 0.44 over the past five years, with the most recent figure standing at 0.40 in 2023. This indicates that the company has a modest improvement in its ability to cover short-term obligations with cash on hand.

Overall, while Sealed Air Corp. has shown some fluctuations in its liquidity ratios, the company's current, quick, and cash ratios have generally improved or remained stable in recent years. This suggests that the company has maintained a reasonable level of liquidity to meet its short-term obligations.

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Additional liquidity measure

Sealed Air Corp.'s cash conversion cycle has fluctuated over the past five years. In 2023, the company's cash conversion cycle stood at 39.60 days, showing an improvement compared to the previous year's 47.74 days. This indicates that the company took fewer days to convert its investments in inventory and other resources into cash receipts from sales during the most recent year.

The cash conversion cycle was notably lower in 2021 at 26.15 days, reflecting efficient working capital management. However, there was an increase in the cycle in 2022 and 2020 compared to 2021, standing at 33.29 days and 31.98 days, respectively. This suggests that the company took longer to convert its investments into cash during those years.

Overall, Sealed Air Corp. experienced fluctuations in its cash conversion cycle over the past five years, indicating varying levels of efficiency in managing its working capital and operating cycle. The company should continue to monitor and optimize its cash conversion cycle to enhance cash flow and operational efficiency.