West Pharmaceutical Services Inc (WST)
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 | 2.79 | 3.00 | 2.34 | 2.61 | 2.88 | 3.70 | 3.66 | 3.62 | 3.70 | 3.80 | 3.13 | 2.89 | 2.93 | 2.86 | 3.13 | 2.75 | 2.73 | 2.77 | 2.96 | 2.84 |
| Quick ratio | 0.88 | 0.95 | 0.70 | 0.93 | 1.27 | 1.68 | 1.56 | 1.66 | 1.72 | 1.60 | 1.27 | 1.14 | 1.28 | 1.62 | 1.67 | 1.44 | 1.65 | 1.63 | 1.19 | 0.97 |
| Cash ratio | 0.88 | 0.95 | 0.70 | 0.93 | 1.27 | 1.68 | 1.56 | 1.66 | 1.72 | 1.60 | 1.27 | 1.14 | 1.28 | 1.62 | 1.67 | 1.44 | 1.65 | 1.63 | 1.19 | 0.97 |
West Pharmaceutical Services Inc has maintained a strong current ratio over the past few years, ranging from 2.34 to 3.80. This indicates that the company has more than enough current assets to cover its short-term obligations, providing a comfortable margin of safety.
The quick ratio, which excludes inventory from current assets, also reflects the company's ability to meet its short-term liabilities. It has generally remained above 1, ranging from 0.70 to 1.72, demonstrating a healthy level of liquidity and suggesting that West Pharmaceutical Services Inc can meet its immediate financial obligations without relying heavily on inventory.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has also been consistently strong for West Pharmaceutical Services Inc. It has ranged from 0.70 to 1.72, showing that the company holds sufficient liquid assets to cover its current liabilities.
Overall, the liquidity ratios of West Pharmaceutical Services Inc indicate that the company is well-positioned to meet its short-term financial obligations and has a solid financial footing to support its operations.
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 | 72.68 | 78.23 | 82.76 | 85.26 | 87.15 | 86.91 | 92.51 | 92.67 | 86.48 | 86.94 | 86.66 | 89.83 | 83.41 | 80.98 | 82.36 | 77.90 | 85.04 | 81.09 | 78.22 | 72.60 |
The cash conversion cycle (CCC) of West Pharmaceutical Services Inc has shown fluctuations over the years, indicating changes in the company's efficiency in managing its cash flows. The CCC measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 2020 to December 2024, the CCC ranged from a low of 72.60 days to a high of 92.67 days. The trend shows some variability, with occasional peaks and valleys, but overall, the CCC seems to have an upward trajectory, reaching a peak in March 2023 before declining in the following periods.
A longer cash conversion cycle suggests that the company takes more time to convert its investments into cash, which can indicate inefficiencies in inventory management, collection processes, or payment practices. Conversely, a shorter CCC implies a more efficient cash flow management.
Analyzing the CCC alongside other financial metrics can provide a more comprehensive view of West Pharmaceutical Services Inc's liquidity, operational efficiency, and overall financial health. A consistent monitoring of the CCC is essential for identifying potential areas of improvement and optimizing cash flow processes to enhance the company's financial performance.