Interface Inc (TILE)

Interface Inc.'s liquidity ratios have shown relatively stable trends over the past five years. The current ratio has improved from 2.08 in 2019 to 2.72 in 2023, indicating the company's ability to cover its short-term obligations with its current assets has strengthened. Similarly, the quick ratio has also exhibited a positive trend, increasing from 1.12 in 2019 to 1.42 in 2023, suggesting the company's ability to meet its immediate liabilities with its most liquid assets has improved.

However, it is worth noting that the cash ratio has fluctuated over the same period, reaching a peak of 0.66 in 2023 but showing some inconsistency in liquidity management. Despite this fluctuation, the cash ratio remains above 0.5 for the past three years, indicating that Interface Inc. has a relatively healthy level of cash reserves to cover its short-term obligations.

Overall, Interface Inc.'s liquidity ratios demonstrate a stable financial position with improving liquidity measures, particularly in terms of current and quick ratios. This indicates the company's ability to efficiently manage its short-term financial responsibilities and suggests a favorable liquidity position for the company going forward.

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Additional liquidity measure

Interface Inc.'s cash conversion cycle has been fluctuating over the past five years. The cycle represents the time it takes for the company to convert its investments in inventory into cash flows from sales. The trend for Interface Inc. shows an increasing cash conversion cycle, which indicates that the company is taking longer to convert its investments into cash.

In 2023, the cash conversion cycle increased to 143.44 days from the previous year's 148.18 days. This suggests that the company is taking slightly less time to convert its investments into cash compared to the prior year, indicating a potential improvement in inventory management or collection of receivables.

Looking back over the past five years, the trend has shown a gradual increase in the cash conversion cycle from 127.66 days in 2019 to 143.44 days in 2023. This indicates that Interface Inc. may be facing challenges in efficiently managing its inventory, collecting receivables, or optimizing its payment cycles.

Overall, Interface Inc. should focus on improving its working capital management practices to shorten its cash conversion cycle, which can lead to increased liquidity and profitability.