Acadia Healthcare Company Inc (ACHC)

Acadia Healthcare Company Inc's liquidity ratios indicate mixed performance over the past five years. The current ratio, which measures short-term liquidity by comparing current assets to current liabilities, decreased from 1.93 in 2020 to 0.67 in 2023. This declining trend suggests potential difficulties in meeting short-term obligations with current assets.

Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also saw a decline from 1.27 in 2022 to 0.65 in 2023. This indicates a decreasing ability to cover immediate liabilities with the most liquid assets on hand.

On the other hand, the cash ratio, which measures the firm's ability to cover short-term liabilities with cash and cash equivalents, demonstrated fluctuation over the years but generally trended downwards from 0.45 in 2021 to 0.21 in 2023. This may suggest a reduced ability to use cash reserves to meet immediate obligations, which could be a cause for concern.

Overall, Acadia Healthcare Company Inc's liquidity ratios, particularly the current and quick ratios, have exhibited a concerning decline, potentially indicating a weakening liquidity position. Further analysis and management attention may be required to address these liquidity challenges and ensure the company's short-term financial health.

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Additional liquidity measure

The cash conversion cycle of Acadia Healthcare Company Inc has shown a fluctuating trend over the past five years. The company's cash conversion cycle increased from 44.07 days in 2019 to 50.70 days in 2020, reflecting a lengthening of the time it takes to convert its investments in inventory and other resources into cash inflows.

However, in the subsequent years, Acadia Healthcare has managed to reduce its cash conversion cycle, reaching its lowest point at 46.31 days in 2021. This improvement indicates more efficient management of working capital and a quicker conversion of resources into cash.

In the most recent year, the cash conversion cycle increased slightly to 49.35 days, which suggests that Acadia Healthcare may have faced challenges in managing its working capital efficiently during that period.

Overall, while there have been fluctuations in Acadia Healthcare's cash conversion cycle over the years, the company has shown an ability to improve its working capital management, resulting in a more efficient conversion of investments into cash inflows despite some temporary setbacks.