Teledyne Technologies Incorporated (TDY)

Teledyne Technologies Inc's liquidity ratios indicate its ability to meet short-term obligations. The current ratio has fluctuated over the past five years, ranging from 1.62 to 2.26, with the latest ratio standing at 1.69 as of Dec 31, 2023. This suggests that the company may have slightly lower liquidity compared to the previous year, but it still has sufficient current assets to cover current liabilities.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also experienced variability, ranging from 1.12 to 1.81 over the same period. The quick ratio for Dec 31, 2023, stands at 1.17, indicating a decreased ability to cover short-term obligations without relying on inventory compared to the previous year.

The cash ratio, which focuses solely on the ability to cover current liabilities with cash and cash equivalents, has shown fluctuations from 0.34 to 0.99 over the past five years. As of Dec 31, 2023, the cash ratio is at 0.49, suggesting that Teledyne Technologies Inc has a lower cash position relative to current liabilities compared to previous years.

Overall, while the company's liquidity ratios have fluctuated over the years, the current ratios indicate that Teledyne Technologies Inc generally has sufficient liquidity to meet its short-term obligations. However, the decreasing trend in quick and cash ratios highlights a potential decrease in the company's ability to cover immediate liabilities with more liquid assets. Management may need to monitor these ratios closely to ensure adequate liquidity levels in the future.

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Additional liquidity measure

The cash conversion cycle of Teledyne Technologies Inc has shown some fluctuations over the past five years.

In 2023, the cash conversion cycle increased to 138.73 days from 122.38 days in 2022, indicating that it took the company longer to convert its investments in inventory and accounts receivable into cash during this period.

Comparing it to previous years, the cash conversion cycle was higher in 2021 at 123.03 days and 2020 at 96.45 days, but slightly lower in 2019 at 99.50 days. This suggests that Teledyne has shown some variability in efficiently managing its cash conversion cycle over the years.

Overall, a longer cash conversion cycle may indicate inefficiencies in managing inventory, sales, and receivables, potentially leading to increased working capital requirements and liquidity challenges. It is essential for the company to evaluate and improve its working capital management practices to optimize its cash flow and overall financial performance.