UFP Technologies Inc (UFPT)

Based on the liquidity ratios of UFP Technologies Inc over the past five years, we can see the following trends:

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term liabilities with its current assets. UFP Technologies Inc's current ratio has been fluctuating over the years, ranging from 2.08 in 2022 to 4.75 in 2020. The ratio has improved in 2023 to 2.48, indicating that the company has increased liquidity to meet its short-term obligations compared to the previous year.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. UFP Technologies Inc's quick ratio has varied over the years, with a low of 1.06 in 2022 and a high of 3.35 in 2020. In 2023, the quick ratio stands at 1.20, showing a slight improvement compared to the previous year but remaining below the levels seen in 2020 and 2021.

3. Cash Ratio:
- The cash ratio measures the proportion of a company's current liabilities that can be covered by its cash and cash equivalents. UFP Technologies Inc's cash ratio has also been fluctuating, with a significant drop from 1.60 in 2020 to 0.09 in 2023. This indicates a decrease in the company's ability to cover its short-term liabilities with cash alone, suggesting potential liquidity challenges.

Overall, UFP Technologies Inc has shown varying levels of liquidity over the past five years, with improvements in certain years but also fluctuations that may require further monitoring and analysis to ensure the company's ability to meet its short-term obligations.

---

Additional liquidity measure

The cash conversion cycle of UFP Technologies Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle increased to 109.67 days from 92.21 days in 2022. This indicates that, on average, it takes the company 109.67 days to convert its investments in inventory and accounts receivable into cash, reflecting a longer operating cycle.

Comparing to previous years, the cash conversion cycle was also higher in 2021 at 113.04 days, indicating a slower conversion of inventory and receivables into cash. In contrast, the company's cash conversion cycle decreased in 2020 to 85.27 days and in 2019 to 80.58 days, showing efficiency in converting investments into cash during those years.

Overall, a longer cash conversion cycle could mean that UFP Technologies Inc is facing challenges in managing its inventory and collecting receivables efficiently, potentially leading to liquidity issues and impacting its working capital management. Monitoring and improving the cash conversion cycle can help the company enhance its cash flow and operational efficiency.