Bio-Techne Corp (TECH)

Bio-Techne Corp's liquidity ratios provide valuable insights into the company's ability to meet its short-term obligations using its current assets. The current ratio, which measures the company's ability to pay off current liabilities with current assets, has shown fluctuations over the past five years. It decreased from 4.88 in 2020 to 3.35 in 2021, but then increased to 3.44 in 2022, and further to 4.84 in 2023, and finally to 3.87 in 2024. A higher current ratio indicates better short-term liquidity, suggesting that Bio-Techne Corp has enough current assets to cover its short-term liabilities.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also exhibited variability over the years. It decreased from 3.69 in 2020 to 2.48 in 2021, then increased to 2.51 in 2022, and further to 3.29 in 2023, and finally to 2.47 in 2024. The quick ratio indicates the company's ability to meet its short-term obligations without relying on selling inventory, and the fluctuations suggest changes in the composition of current assets over time.

Furthermore, the cash ratio, which measures the ability to cover short-term liabilities using only cash and cash equivalents, has shown a decreasing trend from 2.54 in 2020 to 0.96 in 2024, with fluctuations in between. A lower cash ratio may indicate a lower level of cash on hand relative to current liabilities, which could pose liquidity challenges.

Overall, based on the liquidity ratios, Bio-Techne Corp seems to have maintained a solid liquidity position over the years, although there have been fluctuations in the ratios. It is essential to continue monitoring these ratios to ensure the company's ability to meet its short-term obligations and sustain its operations.

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Additional liquidity measure

The cash conversion cycle of Bio-Techne Corp has shown some fluctuations over the past five years. In the latest fiscal year ended June 30, 2024, the company's cash conversion cycle was 128.78 days, indicating an increase compared to the previous year. This suggests that Bio-Techne Corp took longer to convert its investments in inventory and accounts receivable into cash.

Comparing multiple years, we observe that the cash conversion cycle was relatively higher in 2023 and showed an improvement in 2022. However, in 2021 and especially in 2020, there was a significant decrease in the cash conversion cycle, indicating that the company was able to manage its inventory and receivables more efficiently to generate cash.

Overall, it is essential for Bio-Techne Corp to continuously monitor and manage its cash conversion cycle to optimize working capital efficiency. A longer cash conversion cycle may tie up valuable resources and negatively impact the company's liquidity and cash flow management.