Interface Inc (TILE)

Interface Inc's liquidity ratios show a relatively stable current ratio, with values ranging from 2.19 to 2.80 over the period from December 31, 2021, to December 31, 2022. This indicates the company's ability to cover its short-term liabilities with its current assets remains strong.

However, the quick ratio (acid-test ratio) and cash ratio exhibit a declining trend during the same period, from 0.37 to 0.46 and 0.44 to 0.51, respectively. These ratios measure the company's ability to meet its short-term obligations using its most liquid assets. While the quick ratio and cash ratio are lower compared to the current ratio, they still indicate that Interface Inc has sufficient liquid assets to cover its immediate liabilities, though the trend should be monitored for any potential liquidity challenges in the future.

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Additional liquidity measure

Interface Inc's cash conversion cycle has shown some fluctuations over the past five years. Starting at 120.52 days on December 31, 2020, it increased to 126.04 days by December 31, 2021, indicating a slight inefficiency in the company's cash conversion process. The trend continued as the cash conversion cycle further extended to 129.98 days by December 31, 2022, reaching its peak.

However, Interface Inc made improvements in managing its cash conversion cycle as it decreased to 124.16 days by December 31, 2023. This could suggest more effective working capital management or streamlining of operations. Finally, the company was able to further optimize its cash conversion cycle to 114.22 days by December 31, 2024, showing enhanced efficiency in converting its investments in inventory and accounts receivable into cash.

Overall, Interface Inc's fluctuating cash conversion cycle reflects fluctuations in its working capital management efficiency over the past five years, with the company showing a positive trend towards improving its cash conversion process in recent years.