World Kinect Corporation (WKC)

World Kinect Corporation's liquidity ratios have shown a declining trend over the past five years.

1. Current ratio, which measures the company's ability to cover its short-term obligations with its current assets, decreased from 1.57 in 2020 to 1.15 in 2024. While the current ratio remains above 1, indicating the company can meet its short-term obligations, the decreasing trend raises concerns about its ability to easily cover these obligations.

2. Quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, decreased from 1.13 in 2020 to 0.82 in 2024. This indicates a similar declining trend in the company's ability to quickly cover its short-term liabilities without relying on inventory liquidation.

3. Cash ratio, which reflects the company's ability to pay off its current liabilities with cash and cash equivalents, declined significantly from 0.39 in 2020 to 0.11 in 2024. This suggests a decreasing level of cash availability relative to current liabilities, which may signal potential liquidity challenges if not managed effectively.

Overall, the deteriorating liquidity ratios of World Kinect Corporation highlight a potential vulnerability in its ability to meet short-term financial obligations, requiring attention and strategic measures to improve liquidity management in the coming periods.

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Additional liquidity measure

The cash conversion cycle of World Kinect Corporation has shown a consistent improvement over the past five years. From 5.92 days at the end of December 2020, the cycle decreased to 4.47 days by the end of December 2021, indicating an enhancement in the company's efficiency in managing its cash flow. Subsequently, by the end of December 2022, the cycle further decreased to 3.05 days, showcasing continued progress in the company's cash conversion process.

In the following year, as of December 2023, the cash conversion cycle notably reduced to 1.62 days, reflecting a significant improvement in World Kinect Corporation's ability to convert its investments into cash. By the end of December 2024, the cycle decreased even further to 1.42 days, indicating an enhanced efficiency in managing the company's cash conversion activities.

Overall, the decreasing trend in the cash conversion cycle of World Kinect Corporation suggests that the company has been effectively managing its cash flow, inventory, and receivables, resulting in a more streamlined and optimized cash conversion process over the years.