Zebra Technologies Corporation (ZBRA)

Zebra Technologies Corp.'s liquidity ratios demonstrate varying levels of liquidity over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has shown some fluctuations. In 2023, the current ratio improved to 1.05 compared to the prior year at 0.81. However, the ratio remains slightly above 1, indicating that the company's current assets may not be as sufficient to cover its current liabilities.

The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, also presents a similar trend. The ratio increased to 0.54 in 2023 from 0.44 in 2022, but it still indicates that Zebra Technologies Corp. may potentially struggle to meet its immediate obligations without relying on selling inventory.

The cash ratio, which is the most conservative liquidity measure as it only includes cash and cash equivalents, portrays an improvement in the company's liquidity position. Zebra Technologies Corp.'s cash ratio has been increasing steadily over the years, reaching 0.18 in 2023, up from 0.10 in 2022. This indicates a stronger ability to cover its current liabilities with cash on hand, reflecting a positive aspect of the company's liquidity management.

Overall, while Zebra Technologies Corp. has shown some improvements in its liquidity ratios, particularly in the cash ratio, the company still exhibits some challenges in meeting its short-term obligations based on the current and quick ratios. It is essential for the company to continue monitoring and managing its liquidity position effectively to ensure it can meet its financial commitments in a timely manner.

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Additional liquidity measure

The cash conversion cycle of Zebra Technologies Corp. has shown significant fluctuations over the years. In 2023, the company's cash conversion cycle increased to 98.11 days from 55.80 days in 2022, indicating a longer time taken to convert its investments in inventory and other resources back into cash. This might be a concerning trend, as it suggests a potential slowdown in the company's ability to efficiently manage its working capital.

Comparing 2023 to 2021, we notice a substantial increase in the cash conversion cycle from 23.86 days to 98.11 days. This significant jump indicates a considerable elongation in the company's cash conversion process, potentially tied to challenges in managing its inventory, receivables, and payables effectively.

Similarly, comparing the cycle in 2023 to 2020 and 2019, we observe a steady increase in the number of days required to convert resources into cash. This trend suggests a potential inefficiency in Zebra Technologies Corp.'s working capital management over the years.

In summary, the increasing trend in the cash conversion cycle of Zebra Technologies Corp. over the years raises concerns about the company's working capital efficiency and highlights the importance of closely monitoring its cash management strategies to ensure optimal financial performance in the future.