Travel + Leisure Co (TNL)

Based on the liquidity ratios of Travel+Leisure Co over the past five years, the company has maintained strong current ratios, which indicate its ability to cover short-term obligations with its current assets. The current ratio has been consistently above 3, indicating a healthy liquidity position over the years. However, there was a slight decrease in 2021 compared to 2020, but the ratio improved in 2022 and 2023.

In terms of the quick ratio, the company has shown some fluctuations, although it has generally remained below 1, suggesting that a significant portion of its current assets is tied up in inventory. This might raise concerns about the company's ability to meet its short-term obligations without relying on selling inventory.

The cash ratio, which provides a more conservative measure of liquidity by considering only cash and cash equivalents, has also shown fluctuations over the years. Although the cash ratio decreased in 2022 and 2023, it was significantly higher in 2020, indicating a stronger position at that time.

Overall, while Travel+Leisure Co's current ratio reflects a robust liquidity position, the decreasing trend in the quick and cash ratios in recent years may indicate a potential need for the company to closely monitor its liquidity management to ensure it can meet its short-term financial obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Travel+Leisure Co has shown varying trends over the past five years. In 2023, the company's cash conversion cycle increased to 2,945.17 days from the previous year's 2,645.75 days. This indicates that, on average, it takes the company approximately 2,945 days to convert its investments in inventory and other resources back into cash.

Compared to 2020 when the cash conversion cycle was unusually high at 234,548.32 days, the company has made significant improvements in managing its working capital efficiency. However, the cycle still remains relatively long, suggesting that Travel+Leisure Co takes a considerable amount of time to sell its inventory, collect receivables, and pay its suppliers.

Overall, the company should focus on streamlining its operational processes to reduce the cash conversion cycle further, as a shorter cycle indicates better liquidity management and increased efficiency in utilizing its resources.