WESCO International Inc (WCC)

The liquidity ratios of Wesco International, Inc. have shown a fluctuating trend over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been increasing over the years, indicating a favorable liquidity position. In 2023, the current ratio reached 2.48, suggesting that Wesco International has $2.48 in current assets for every $1 in current liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Similar to the current ratio, the quick ratio has been increasing over the years, with a value of 1.42 in 2023. This indicates that Wesco International has $1.42 in highly liquid assets that can be quickly converted into cash to cover immediate liabilities.

Furthermore, the cash ratio, which is the most conservative liquidity ratio, focuses solely on cash and cash equivalents relative to current liabilities. Wesco International's cash ratio has varied over the years but has generally been at an acceptable level, with the highest value of 0.22 in 2023. This suggests that the company has $0.22 in cash for every $1 in current liabilities, indicating a sufficient cash position to meet short-term obligations.

Overall, the improving trend in the current, quick, and cash ratios for Wesco International, Inc. indicates a strengthening liquidity position and suggests that the company has the ability to meet its short-term financial commitments.

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Additional liquidity measure

The cash conversion cycle for Wesco International, Inc. has displayed fluctuations over the past five years. In 2019, the company had the shortest cash conversion cycle of 66.60 days, indicating efficient management of cash flows from operations, inventory, and accounts receivable. However, by 2020, the cash conversion cycle increased to 96.80 days, suggesting a slower conversion of investments in inventory and accounts receivable into cash.

In 2021, there was a notable improvement in the cash conversion cycle, decreasing to 80.10 days, signaling a more effective management of working capital. This improvement was further enhanced in 2022, with the cycle decreasing to 86.62 days.

By the end of 2023, the cash conversion cycle increased slightly to 90.10 days, indicating a moderate increase in the time taken to convert investments into cash. Overall, Wesco International, Inc.'s cash conversion cycle has shown variability, with fluctuations observed over the years. Further analysis would be beneficial to identify the specific factors influencing these fluctuations and to assess the company's overall cash management efficiency.