Silgan Holdings Inc (SLGN)

Silgan Holdings Inc's liquidity ratios have shown some fluctuations over the years.

1. Current Ratio: Silgan's current ratio has been relatively stable between 1.54 to 1.57 from 2020 to 2022. This indicates that the company's current assets are sufficient to cover its current liabilities. However, there was a noticeable decline in 2023 to 1.02, which suggests a potential liquidity concern. The ratio improved slightly in 2024 to 1.12 but still remains below the ideal ratio of 2:1.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, has also displayed some variability. It increased from 0.35 in 2020 to 0.43 in 2022, indicating an improvement in the company's ability to meet its short-term obligations without relying heavily on inventory. However, there was a significant drop to 0.28 in 2023, signaling a potential liquidity strain. The ratio slightly recovered in 2024 to 0.37.

3. Cash Ratio: The cash ratio, which measures a company's ability to cover its current liabilities with its cash and cash equivalents, mirrors the trend seen in the quick ratio. It ranged from 0.35 to 0.43 from 2020 to 2022 before declining to 0.28 in 2023. The ratio rebounded slightly in 2024 to 0.37, indicating a better position in terms of cash liquidity compared to 2023.

In summary, while Silgan Holdings Inc generally maintains a decent liquidity position as indicated by the current, quick, and cash ratios, there was a concerning dip in 2023. The company should continue to monitor and manage its liquidity effectively to ensure it can meet its short-term obligations in a sustainable manner.

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Additional liquidity measure

The cash conversion cycle of Silgan Holdings Inc has shown some fluctuations over the years. In 2020, the company had a cash conversion cycle of 60.99 days, which slightly increased to 61.27 days in 2021. However, there was a notable improvement in 2022, with the cycle decreasing to 52.36 days. This improvement indicates a more efficient management of working capital and cash flow during that period.

In 2023, there was a significant spike in the cash conversion cycle to 306.17 days, which could indicate potential issues with collection periods, inventory turnover, or payment terms. This sharp increase might require further investigation to identify the underlying causes and implement corrective actions.

Lastly, in 2024, the cash conversion cycle decreased to 69.95 days, showing a recovery from the notable increase in the previous year. Overall, monitoring and managing the cash conversion cycle is crucial for Silgan Holdings Inc to ensure efficient operations and optimize working capital management. Vigilance in addressing any abnormal fluctuations in the cycle will be important for the company's financial health and performance.