Teledyne Technologies Incorporated (TDY)

Based on the provided data, we can analyze the liquidity ratios of Teledyne Technologies Incorporated as follows:

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term obligations with its current assets.
- Teledyne's current ratio has fluctuated over the years, from 2.26 in 2020, declining to 1.64 in 2021, before improving to 2.33 in 2024.
- A current ratio above 1 indicates that the company has more current assets than current liabilities to meet its short-term obligations.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets.
- Teledyne's quick ratio has shown a similar trend to the current ratio, dropping from 0.88 in 2020 to 0.32 in 2021, and then increasing to 0.52 in 2024.
- A quick ratio below 1 may indicate potential difficulty in meeting short-term obligations without relying on selling inventory.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio as it only considers cash and cash equivalents in relation to current liabilities.
- Teledyne's cash ratio mirrors the trend of the quick ratio, dropping from 0.88 in 2020 to 0.32 in 2021, and then recovering to 0.52 in 2024.
- A cash ratio below 1 suggests that the company may need to rely on sources other than cash to meet its short-term obligations.

Overall, analyzing these liquidity ratios provides insight into Teledyne's ability to meet its short-term financial obligations. While the company experienced fluctuations in its liquidity position over the years, the upward trend in the current, quick, and cash ratios from 2021 to 2024 indicates an improvement in its liquidity position and ability to cover short-term liabilities.

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Additional liquidity measure

The cash conversion cycle of Teledyne Technologies Incorporated has shown an increasing trend over the years, from 66.53 days as of December 31, 2020, to 103.16 days as of December 31, 2024. This indicates that the company is taking longer to convert its investments in inventory and receivables into cash.

A longer cash conversion cycle may suggest inefficiencies in managing working capital, potentially leading to increased carrying costs and liquidity risk. It is essential for the company to closely monitor its inventory management and accounts receivable collection processes to optimize its cash flow efficiency and overall financial performance.