Sealed Air Corporation (SEE)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.16 1.29 1.30 1.33 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
Quick ratio 0.23 0.24 0.25 0.23 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
Cash ratio 0.23 0.24 0.25 0.23 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

Sealed Air Corporation's liquidity ratios show mixed performance over the past few years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has fluctuated within a range of 1.02 to 1.38. The current ratio has shown some volatility but generally stayed above 1, indicating that Sealed Air has been able to meet its short-term obligations.

On the other hand, the quick ratio, also known as the acid-test ratio, focuses on the company's most liquid assets to cover its short-term liabilities. Sealed Air's quick ratio has been low, ranging from 0.13 to 0.40. This suggests that the company may have difficulty meeting its immediate obligations using only its liquid assets.

The cash ratio, which is the most stringent liquidity ratio, measures the company's ability to cover its current liabilities with only its cash and cash equivalents. Sealed Air's cash ratio has been consistent with its quick ratio, indicating that the company may have limited cash reserves available to cover its short-term obligations.

In conclusion, while Sealed Air Corporation has maintained a current ratio above 1, signaling short-term solvency, its relatively low quick and cash ratios may indicate a potential liquidity risk, emphasizing the importance of effective management of cash flows and liquid assets.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 69.38 77.06 76.44 74.62 73.11 78.95 88.88 90.65 81.73 89.08 85.55 78.41 68.75 72.84 75.28 70.51 66.12 70.92 71.88 63.57

The cash conversion cycle of Sealed Air Corporation has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Starting at 63.57 days on March 31, 2020, the cash conversion cycle increased to its peak of 90.65 days on March 31, 2023, indicating that the company took longer to convert its resources into cash during that period. This increase may suggest inventory management challenges, longer accounts receivable collection periods, or delays in payables.

However, the cash conversion cycle improved by the end of the period, declining to 69.38 days on December 31, 2024. This reduction could be attributed to more efficient inventory management, faster collection of receivables, or better payment terms with suppliers.

A shorter cash conversion cycle generally indicates that a company is managing its working capital effectively, whereas a longer cycle may signal inefficiencies in operations. It is essential for Sealed Air Corporation to monitor its cash conversion cycle continuously to ensure optimal working capital management and sustainable cash flows in the future.