Dentsply Sirona Inc (XRAY)

Dentsply Sirona Inc's liquidity ratios show varying levels of liquidity over the years.

1. Current Ratio: The company's current ratio has been fluctuating, starting at 1.36 in 2020, increasing to 1.62 in 2022, and then dropping to 1.10 in 2024. A current ratio above 1 indicates that the company has more current assets than current liabilities to cover its short-term obligations. However, the decreasing trend from 2022 to 2024 may indicate a potential strain on the company's short-term liquidity position.

2. Quick Ratio: Dentsply Sirona Inc's quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown a declining trend over the years. Starting at 0.36 in 2020, the quick ratio decreased to 0.17 in 2024. A quick ratio below 1 suggests the company may have difficulty meeting its short-term obligations without relying on selling inventory.

3. Cash Ratio: The cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, has followed a similar trend to the quick ratio, starting at 0.36 in 2020 and declining to 0.17 in 2024. This indicates a decreasing ability to cover short-term obligations solely with cash reserves.

Overall, while the current ratio indicates a generally stable liquidity position for Dentsply Sirona Inc, the downward trend in both the quick and cash ratios from 2020 to 2024 raises concerns about the company's ability to meet its short-term obligations without relying on inventory or cash reserves. Management should closely monitor these ratios and take appropriate measures to maintain a healthy liquidity position.

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Additional liquidity measure

The cash conversion cycle of Dentsply Sirona Inc has fluctuated over the years based on the provided data. In 2020, the company's cash conversion cycle was 100.94 days, which decreased to 97.33 days by the end of 2021, indicating an improvement in the efficiency of managing its cash, inventory, and receivables.

However, there was a notable increase in the cash conversion cycle in 2022, rising to 127.50 days, followed by a slight decrease to 121.21 days in 2023. This suggests that the company may have experienced challenges in effectively converting its investments in raw materials and services into cash during these periods.

By the end of 2024, Dentsply Sirona Inc managed to reduce its cash conversion cycle to 112.19 days, showing a positive trend compared to the previous year. Overall, the company's cash conversion cycle has remained relatively stable, with fluctuations likely influenced by factors such as inventory management, accounts receivable collection, and payment practices.