Sealed Air Corporation (SEE)

Liquidity ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 1.30 1.23 1.20 1.19 1.02 1.08 1.34 1.31 1.03 1.02 1.29 1.33 1.38 1.27 1.20 1.14 1.09 1.06 0.99 1.05
Quick ratio 0.61 0.52 0.48 0.53 0.57 0.53 0.67 0.71 0.64 0.60 0.72 0.80 0.90 0.75 0.66 0.63 0.65 0.51 0.54 0.56
Cash ratio 0.23 0.16 0.15 0.17 0.22 0.13 0.19 0.19 0.28 0.20 0.19 0.28 0.40 0.24 0.21 0.20 0.18 0.13 0.14 0.16

Sealed Air Corp.'s liquidity ratios paint a picture of the company's ability to meet its short-term obligations effectively. The current ratio, which measures the firm's ability to cover its current liabilities with its current assets, has been fluctuating over the past eight quarters, ranging from a low of 1.02 in Q4 2022 to a high of 1.30 in Q4 2023. Generally, a current ratio above 1 indicates the company has more current assets than current liabilities, implying good short-term financial health.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also fluctuated over the same period, ranging from 0.57 in Q3 2022 to 0.79 in Q4 2023. The quick ratio indicates that Sealed Air Corp. may have more difficulty meeting its short-term obligations as compared to the current ratio but still shows an improving trend.

Lastly, the cash ratio, which measures the company's ability to cover its current liabilities using only cash and cash equivalents, also exhibited fluctuations between 0.17 in Q3 2022 and 0.40 in Q4 2023. A rising trend in the cash ratio indicates an enhanced ability to cover short-term obligations with cash on hand.

In summary, the liquidity ratios of Sealed Air Corp. have shown variability over the past eight quarters, with the current and cash ratios generally improving, while the quick ratio remains slightly below desired levels. This suggests that the company may need to manage its liquidity more efficiently, especially concerning its ability to convert current assets into cash quickly.

Additional liquidity measure

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 39.60 48.86 53.23 52.62 47.74 52.33 41.27 39.16 26.15 34.95 37.07 32.94 33.29 39.96 35.58 27.30 31.98 33.20 30.91 26.49

The cash conversion cycle of Sealed Air Corp. has exhibited fluctuating trends over the past eight quarters. In Q1 2022, the company had a relatively shorter cash conversion cycle of 39.16 days, indicating an efficient management of cash flows from operations, inventory, and accounts receivable. However, this cycle increased in Q2 2022 to 41.27 days before decreasing again in Q4 2022 to 47.74 days.

The trend continued with an increase in the cash conversion cycle in Q1 2023 to 52.62 days, followed by a slight improvement in Q2 2023 to 53.23 days, before decreasing in Q4 2023 to 39.60 days. Despite the fluctuations, it is notable that the company has managed to maintain the cycle within a range of approximately 39 to 53 days over the eight quarters analyzed.

A shorter cash conversion cycle indicates that the company is able to convert its investments in inventory and accounts receivable into cash more quickly, which can be a positive sign of operational efficiency. However, significant fluctuations in the cycle may also suggest challenges in managing working capital effectively. It would be beneficial for Sealed Air Corp. to analyze the factors contributing to these fluctuations and implement strategies to stabilize and potentially optimize its cash conversion cycle in the future.