Teleflex Incorporated (TFX)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 2.32 | 2.43 | 2.10 | 2.63 | 2.32 |
| Quick ratio | 1.10 | 1.29 | 1.25 | 1.46 | 1.32 |
| Cash ratio | 0.37 | 0.59 | 0.69 | 0.73 | 0.57 |
Teleflex Incorporated's liquidity ratios indicate the company's ability to meet its short-term financial obligations. The current ratio, which measures the firm's ability to cover its short-term liabilities with its current assets, has shown some fluctuations over the past five years. It decreased from 2.63 in 2020 to 2.10 in 2021 before recovering to 2.43 in 2022 and further improving to 2.32 in 2023. Overall, the current ratio remains relatively strong, suggesting Teleflex has sufficient current assets to cover its current liabilities.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also demonstrates a similar trend as the current ratio. It decreased from 1.68 in 2020 to 1.40 in 2021 but has been consistently improving since then, reaching 1.43 in 2022 and 1.29 in 2023. This indicates that the company has a reasonable level of quick assets to cover its short-term obligations.
The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has experienced fluctuations over the years. It dropped from 0.95 in 2020 to 0.84 in 2021, then further to 0.73 in 2022, and again to 0.56 in 2023. While the cash ratio has decreased, it still indicates that Teleflex has a decent level of cash readily available to meet its immediate obligations.
Overall, Teleflex's liquidity ratios reflect a generally solid liquidity position, with the current and quick ratios well above 1.0, indicating a healthy ability to cover short-term liabilities. However, the decreasing trend in the cash ratio suggests that the company may need to monitor its cash position closely to ensure it can meet its short-term obligations effectively.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 126.51 | 123.55 | 105.88 | 125.39 | 120.37 |
The cash conversion cycle of Teleflex Incorporated has shown some fluctuations over the past five years. In 2023, the company's cash conversion cycle was 190.23 days, which was higher compared to the previous year's cycle of 184.32 days. This increase indicates that Teleflex took longer to convert its investments in inventory into cash receipts from sales.
Looking back at 2021, the cash conversion cycle was 153.95 days, showing a significant improvement from 180.48 days in 2020. This suggests that the company was able to manage its working capital more efficiently in 2021.
In general, Teleflex's cash conversion cycle has varied over the period analyzed, potentially indicating fluctuations in the company's efficiency in managing its cash flow, inventory, and accounts receivable. It would be important for stakeholders to monitor this metric closely to ensure that the company's working capital management remains effective.