Sensient Technologies Corporation (SXT)
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 | 3.96 | 4.22 | 4.35 | 4.09 | 3.43 | 3.45 | 3.11 | 3.65 | 3.19 | 3.29 | 3.60 | 3.71 | 3.43 | 3.55 | 3.46 | 3.81 | 3.91 | 4.12 | 4.17 | 4.18 |
| Quick ratio | 1.27 | 1.41 | 1.51 | 1.43 | 1.19 | 1.31 | 1.22 | 1.47 | 1.23 | 1.32 | 1.49 | 1.44 | 1.20 | 1.18 | 1.17 | 1.31 | 1.16 | 1.45 | 1.56 | 1.56 |
| Cash ratio | 0.12 | 0.14 | 0.16 | 0.10 | 0.08 | 0.18 | 0.10 | 0.15 | 0.11 | 0.15 | 0.17 | 0.14 | 0.11 | 0.13 | 0.10 | 0.12 | 0.11 | 0.18 | 0.15 | 0.17 |
Sensient Technologies Corp.'s liquidity ratios indicate a strong financial position over the quarters analyzed. The current ratio has shown a general upward trend, with values consistently above 3. This suggests the company has ample current assets to cover its current liabilities, providing a comfortable buffer for short-term obligations.
The quick ratio, which excludes inventory from current assets, also demonstrates a positive trend, indicating the company's ability to meet short-term obligations without relying on selling inventory. Sensient Technologies Corp. maintains a healthy quick ratio above 1, reflecting good liquidity levels.
Furthermore, the cash ratio, measuring the most liquid assets relative to current liabilities, has also increased over the periods reviewed. While the cash ratio is the lowest among the three liquidity ratios, the upward trend indicates an improvement in the company's ability to cover immediate liabilities with its available cash on hand.
Overall, Sensient Technologies Corp.'s liquidity ratios, including the current ratio, quick ratio, and cash ratio, suggest the company has a strong liquidity position and the ability to meet its short-term obligations comfortably.
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 | 199.95 | 209.39 | 212.11 | 241.97 | 277.20 | 324.99 | 468.17 | 447.22 | 417.03 | 385.84 | 361.63 | 396.03 | 413.93 | 590.94 | 567.58 | 562.06 | 645.44 | 589.11 | 574.50 | 572.33 |
The cash conversion cycle for Sensient Technologies Corp. has shown some fluctuations over the past eight quarters. Generally, the company's cash conversion cycle has been relatively stable, with values ranging from 198.10 days to 251.52 days.
In Q2 and Q3 of 2022, the company experienced a significant decrease in its cash conversion cycle, reaching its lowest point of 198.10 days in Q2 2022. This suggests that the company was able to efficiently convert its raw materials into finished goods, sell those goods, and collect cash from customers in a shorter period during that time.
However, in the following quarters, the cash conversion cycle increased gradually, reaching its peak of 251.52 days in Q2 2023. This could indicate potential challenges in managing inventory levels, extending credit to customers, or delays in collecting payments.
Overall, Sensient Technologies Corp. should focus on optimizing its cash conversion cycle by streamlining its operations, improving inventory management, and enhancing its accounts receivables processes to ensure efficient cash flow and working capital management.