Dentsply Sirona Inc (XRAY)

Liquidity ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 1.38 1.57 1.51 1.41 1.62 1.50 1.52 1.38 1.47 1.51 1.43 1.40 1.31 2.19 3.10 2.02 2.01 2.08 2.08 2.06
Quick ratio 0.76 0.79 0.76 0.71 0.87 0.82 0.82 0.79 0.86 0.84 0.81 0.79 0.81 1.61 2.11 1.06 1.23 1.06 1.08 1.02
Cash ratio 0.23 0.25 0.23 0.23 0.33 0.32 0.29 0.27 0.27 0.23 0.27 0.26 0.32 1.08 1.45 0.26 0.45 0.26 0.28 0.26

The liquidity ratios of DENTSPLY Sirona Inc indicate the company's ability to meet its short-term obligations and cover immediate financial needs.

The current ratio has shown variability over the eight quarters, ranging from 1.38 to 1.62. While the current assets have generally been sufficient to cover current liabilities, the downward trend since Q4 2022 suggests a slight deterioration in short-term liquidity position. A ratio above 1 indicates the company's ability to meet its short-term obligations with its current assets.

The quick ratio, which considers only the most liquid assets (excluding inventory), has also displayed fluctuations, ranging from 0.93 to 1.08. Despite the variability, it generally reflects a lower level of liquidity compared to the current ratio. The downward trend observed may indicate potential challenges in meeting short-term obligations without relying on inventory.

The cash ratio, reflecting the company's ability to cover current liabilities with its cash and cash equivalents, has remained relatively stable between 0.46 and 0.54 over the periods analyzed. This indicates that DENTSPLY Sirona Inc may have more limited cash resources relative to its current liabilities.

Overall, while the current ratio suggests a satisfactory level of liquidity, the decreasing trend raises some concerns. The quick and cash ratios provide a more conservative assessment of the company's liquidity position, highlighting potential limitations in meeting short-term obligations without relying on inventory or non-cash assets. Monitoring these ratios over time will be essential to assess any ongoing changes in DENTSPLY Sirona Inc's short-term liquidity position.

Additional liquidity measure

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 124.38 96.02 91.73 90.27 85.73 86.30 93.21 94.65 94.57 97.51 93.20 29.28 96.46 94.25 87.88 95.64 95.72 99.08 99.70 92.87

The cash conversion cycle of DENTSPLY Sirona Inc has shown some variability over the past eight quarters. In Q4 2023, it decreased to 125.95 days from the previous quarter's 136.73 days. This suggests that the company was able to convert its investments in inventory and accounts receivable into cash more efficiently during that period.

However, in comparison to Q2 and Q3 of 2023, where the cash conversion cycle was 139.81 days and 139.76 days respectively, the improvement in Q4 indicates a positive trend in managing cash flow.

Looking back further, the cash conversion cycle has generally been fluctuating within a range of 115 to 140 days over the past two years. Although there was a slight increase in Q4 2022 compared to earlier quarters, the cycle seems to have been relatively stable around the 120-130 day mark.

Overall, a decreasing cash conversion cycle is generally seen as a positive indicator, as it reflects the company's ability to efficiently collect receivables, manage inventory, and convert them into cash. DENTSPLY Sirona Inc should continue monitoring and managing its cash conversion cycle effectively to optimize its working capital management.