Waters Corporation (WAT)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 2.11 2.02 2.10 1.94 2.22 2.19 2.08 2.21 2.24 2.15 2.10 2.30 2.39 2.47 2.41 2.25 1.74 1.79 1.82 2.41
Quick ratio 1.34 1.23 1.23 1.14 1.39 1.30 1.27 0.59 1.53 0.59 0.54 0.71 1.74 0.95 0.95 1.01 1.26 1.23 1.22 1.66
Cash ratio 0.41 0.41 0.43 0.40 0.50 0.45 0.41 0.61 0.61 0.61 0.56 0.73 0.84 0.98 0.97 1.03 0.55 0.55 0.51 0.71

Waters Corporation's liquidity ratios have shown stability and strength over the past few years. The current ratio, which indicates the company's ability to cover short-term liabilities with its current assets, has generally been above 2, ranging from 1.74 to 2.47. This suggests that Waters Corporation has a comfortable cushion of current assets to meet its short-term obligations.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has varied more significantly, ranging from 0.54 to 1.74. While some fluctuations are noted, the quick ratio has generally been above 1, indicating that Waters Corporation can cover its short-term liabilities without relying on selling inventory.

The cash ratio, which measures the company's ability to cover current liabilities with only its cash and cash equivalents, has also displayed stability, ranging from 0.40 to 1.03. This suggests that Waters Corporation has a solid cash position to meet its immediate obligations if needed.

Overall, the liquidity ratios of Waters Corporation indicate a healthy financial position with sufficient short-term liquidity to meet its obligations. The stable current ratio and adequate quick ratio and cash ratio demonstrate the company's ability to manage its short-term financial commitments effectively.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days 210.26 222.13 217.87 221.29 224.78 222.91 235.46 181.95 214.64 118.43 108.26 97.94 173.46 110.81 100.03 77.26 181.82 190.36 204.03 198.84

The cash conversion cycle for Waters Corporation has exhibited some fluctuations over the reported periods. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to June 30, 2022, the cash conversion cycle ranged between approximately 77 to 204 days, showing some variability. During this period, the company managed to reduce the cycle significantly in the first half of 2021, indicating efficient management of working capital.

However, from September 30, 2022, to December 31, 2024, the cash conversion cycle increased consistently, peaking at 235.46 days in June 30, 2023. This increase may suggest challenges in managing inventory levels, collecting receivables, or extending payment terms. A prolonged cash conversion cycle can tie up cash resources and impact liquidity and overall financial performance.

In summary, while Waters Corporation initially demonstrated effectiveness in reducing its cash conversion cycle, it later experienced an extended cycle period, potentially signaling underlying operational or financial challenges that need to be addressed to improve working capital efficiency.