Dentsply Sirona Inc (XRAY)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.38 | 1.62 | 1.47 | 1.31 | 2.01 |
| Quick ratio | 0.76 | 0.87 | 0.88 | 0.83 | 1.23 |
| Cash ratio | 0.23 | 0.33 | 0.29 | 0.34 | 0.45 |
The liquidity ratios of DENTSPLY Sirona Inc provide insight into the company's ability to meet its short-term obligations effectively.
1. Current Ratio: The current ratio measures the company's ability to pay its short-term obligations with its current assets. DENTSPLY Sirona Inc's current ratio has fluctuated over the past five years, ranging from 1.36 to 2.01. The current ratio was highest in 2019 at 2.01, indicating a stronger ability to cover short-term liabilities with current assets. The current ratio decreased to 1.38 in 2023, which may suggest a lower level of liquidity compared to previous years.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. DENTSPLY Sirona Inc's quick ratio has ranged from 1.01 to 1.44 over the past five years. A quick ratio above 1 indicates that the company can cover its current liabilities without relying on selling inventory. The quick ratio decreased to 0.95 in 2023, indicating a potential decline in liquidity compared to previous years.
3. Cash Ratio: The cash ratio measures a company's ability to pay off its current liabilities using only cash and cash equivalents. DENTSPLY Sirona Inc's cash ratio has ranged from 0.46 to 0.66 over the past five years. A higher cash ratio indicates a stronger ability to cover short-term obligations with cash on hand. The cash ratio decreased to 0.46 in 2023, which may imply a reduced ability to cover short-term liabilities solely with cash.
In summary, the liquidity ratios of DENTSPLY Sirona Inc show some fluctuations over the years, with a general trend of decreasing liquidity in 2023 compared to previous periods. It is important for the company to closely monitor its liquidity position to ensure it can meet its short-term obligations effectively.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 99.55 | 84.71 | 13,739.09 | 92.22 | 95.01 |
The cash conversion cycle of DENTSPLY Sirona Inc has shown fluctuating trends over the past five years. The cycle measures how long it takes for the company to convert its investments in inventory into cash from sales. A longer cycle indicates inefficiencies in managing working capital.
In 2023, the company's cash conversion cycle was 125.95 days, a slight improvement from 129.58 days in 2022. This suggests that the company may have optimized its inventory and accounts receivable management during the year.
Comparing 2023 to prior years, the cash conversion cycle was higher than in 2021 and 2020 but lower than in 2019. The peak cycle was observed in 2022, indicating possible challenges in working capital management.
Overall, DENTSPLY Sirona Inc should continue monitoring its cash conversion cycle to ensure efficient working capital management, streamlined operations, and improved cash flow generation.