Bio-Techne Corp (TECH)

The liquidity ratios of Bio-Techne Corp over the period presented reflect a generally stable liquidity position with some variation across different measures and time frames.

Current Ratio:
The current ratio consistently remained well above the typical threshold of 1.0, indicating a strong ability to meet short-term obligations. Starting at 5.14 on September 30, 2020, and gradually declining to a low of approximately 3.35 by June 30, 2021, the ratio experienced some fluctuation but remained robust throughout. From late 2021 onward, it generally stabilized in the 3.8 to 4.8 range, with a peak of 4.84 on June 30, 2023, before slightly decreasing to 4.37 by December 2023. The ratio's slight downward trend in the subsequent periods reflects a moderation but continues to suggest ample liquidity.

Quick Ratio:
The quick ratio, which excludes inventories, also demonstrates a strong liquidity position, remaining above 2.0 throughout the period. Starting at 3.89 on September 30, 2020, it declined to as low as 2.48 on June 30, 2021, then generally increased again, reaching as high as 3.29 on June 30, 2023. Recent figures indicate a slight decrease to around 2.10 as of June 30, 2025. Despite minor fluctuations, the quick ratio consistently indicates the company's capacity to cover near-term liabilities with liquid assets excluding inventories.

Cash Ratio:
The cash ratio, representing the most conservative measure of liquidity, remained above 1.0 during most of the analyzed periods, signaling an ability to meet short-term liabilities with cash and cash equivalents alone. The ratio was 2.73 on September 30, 2020, decreasing in subsequent periods to lows around 1.00 in late 2023 and mid-2024, and further declining to approximately 0.83 by March 2025. These fluctuations suggest that while cash reserves have experienced periods of decline, overall liquidity remains relatively solid, though the recent decrease indicates a trend toward lower immediate cash coverage.

Overall Evaluation:
Bio-Techne Corp's liquidity ratios across current, quick, and cash measures indicate a stable and healthy liquidity position over the period analyzed. The ratios reveal a company capable of comfortably meeting its short-term obligations, with some modest declining trends in cash availability in recent periods. The strong current and quick ratios imply that the company maintains sufficient liquid assets and receivables to cover current liabilities, though reliance on cash reserves has diminished somewhat in the latest periods.

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Additional liquidity measure

The analysis of Bio-Techne Corp's cash conversion cycle (CCC) over the period from September 2020 to June 2025 reveals significant fluctuations and an overall increasing trend in the duration of the cycle. Initially, in September 2020, the CCC was approximately 170.80 days, reflecting the combined period of inventory holding, receivables collection, and payables deferral. Throughout 2020 and into early 2021, the cycle exhibited minor variations, remaining within the range of approximately 159.86 to 178.56 days.

From mid-2021 onward, the CCC demonstrated a gradual upward trajectory, reaching levels above 200 days by the end of 2022. Notably, December 2022 recorded a CCC of 200.16 days, and by March 2023, it increased further to 215.37 days, continuing the trend into late 2023, where the cycle peaked at approximately 221.74 days in September 2023. This escalation indicates a lengthening in the time taken to convert investments into cash flows, driven potentially by extended inventory periods, slower receivables collection, or changes in payable practices.

The first half of 2024 saw a marginal reduction, with the CCC decreasing from 215.75 days in March to approximately 209.67 days in June, and further to around 209.09 days in September 2024. This suggests some operational efficiencies or shifts in working capital management. However, the cycle slightly increased again by December 2024 to approximately 210.95 days, and subsequently varied around the 212-day mark in early 2025.

Importantly, a marked change appears in June 2025, where the CCC sharply declines to approximately 123.70 days, a substantial reduction compared to previous levels. This indicates a significant improvement in the company's working capital management, likely due to process efficiencies, shorter receivables collection periods, inventory reductions, or favorable payment terms.

Overall, the period displays a trend of increasing CCC during 2021 through early 2023, followed by stabilization with minor fluctuations, and culminating with a notable decrease in mid-2025. This evolution reflects considerable strategic or operational adjustments impacting the company's working capital cycle, with the recent reduction representing a potential move toward increased efficiency in converting operational activities into cash.