ADMA Biologics Inc (ADMA)

ADMA Biologics Inc's liquidity ratios, namely the current ratio, quick ratio, and cash ratio, provide valuable insights into the company's ability to meet its short-term obligations using its current assets.

The current ratio, which measures the company's ability to cover its current liabilities with its current assets, has been relatively stable over the years. It decreased from 7.71 in December 2020 to 5.97 in December 2024, indicating a slight decline in liquidity but still showing that ADMA Biologics Inc has ample current assets to cover its current liabilities.

The quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, also shows a decreasing trend from 3.47 in December 2020 to 2.76 in December 2024. While the quick ratio declined over the years, it still suggests that the company has a solid ability to meet its short-term obligations without relying on inventory.

The cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, shows some fluctuations throughout the years, ranging from 1.03 to 2.80. Although the cash ratio decreased to 1.86 in December 2024, it indicates that ADMA Biologics Inc has a reasonable amount of cash reserves to meet its short-term obligations.

Overall, while the liquidity ratios of ADMA Biologics Inc have shown some decrease over the years, they still suggest that the company has a strong liquidity position and should be able to meet its short-term financial obligations. However, management should continue to monitor these ratios to ensure adequate liquidity levels for future operations and growth.

---

Additional liquidity measure

ADMA Biologics Inc's cash conversion cycle has shown fluctuations over the years. From December 31, 2020, to December 31, 2021, there was an increase in the cycle from 534.05 days to 642.69 days, indicating a longer time taken to convert resources into cash. However, improvements were seen in the following years, with the cycle decreasing to 497.69 days on December 31, 2022, 377.83 days on December 31, 2023, and further to 307.44 days on December 31, 2024. This downward trend suggests that ADMA Biologics Inc has been more efficient in managing its cash inflows and outflows, potentially enhancing liquidity and operational effectiveness.