Adapthealth Corp (AHCO)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.33 1.24 1.15 1.33 1.21 1.31 1.24 1.23 1.28 1.35 1.39 1.39 1.34 1.64 0.98 0.98 0.86 1.54 1.03 1.02
Quick ratio 0.99 0.96 0.93 1.11 1.00 1.07 0.99 0.94 0.99 1.06 1.14 1.15 1.07 1.40 0.82 0.79 0.69 1.39 0.96 0.97
Cash ratio 0.19 0.18 0.13 0.17 0.15 0.14 0.11 0.20 0.11 0.25 0.27 0.27 0.30 0.67 0.29 0.26 0.24 0.87 0.43 0.25

The liquidity ratios of Adapthealth Corp show the company's ability to meet its short-term obligations and are crucial indicators of financial health.

1. Current Ratio: Adapthealth Corp's current ratio has fluctuated over time, indicating some variability in its short-term liquidity position. The company maintained a current ratio above 1 for most periods, suggesting it had sufficient current assets to cover its current liabilities. However, there were a few quarters where the current ratio dipped below 1, which may raise concerns about potential liquidity issues during those periods.

2. Quick Ratio: The quick ratio also displays fluctuations but generally remained above 1 for the majority of the periods. This implies that Adapthealth Corp had an acceptable level of quick assets (such as cash and equivalents) to cover its current liabilities without relying on slower-moving inventory. A quick ratio above 1 is generally considered favorable for liquidity risk management.

3. Cash Ratio: The cash ratio provides insight into the company's ability to meet its obligations using only its cash and cash equivalents. Adapthealth Corp's cash ratio trended above 0.1 for most periods, indicating that it had a reasonable level of cash reserves relative to its current liabilities. However, the cash ratio declined in some quarters, indicating potential challenges in meeting short-term obligations solely from cash on hand.

In conclusion, while Adapthealth Corp generally maintained acceptable liquidity levels, the fluctuations in its ratios suggest the need for ongoing monitoring and management of liquidity risks to ensure the company can meet its short-term financial obligations effectively.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 30.33 27.54 34.46 38.33 41.20 40.61 34.64 25.32 37.17 48.48 53.18 55.92 60.76 57.23 45.25 56.77 47.59 41.57 38.85 37.77

The cash conversion cycle of Adapthealth Corp has shown fluctuations over the periods under consideration. Starting from 37.77 days on March 31, 2020, it gradually increased to a peak of 60.76 days on December 31, 2021. Subsequently, there was a decrease in the cycle, reaching 27.54 days on September 30, 2024.

The cash conversion cycle is a measure of how long a company takes to convert its investments in inventory back into cash. A longer cycle typically indicates inefficiencies in managing inventory, collecting receivables, or paying suppliers. Conversely, a shorter cycle suggests better working capital management.

Adapthealth Corp's fluctuations in the cash conversion cycle indicate potential changes in its operational efficiency and effectiveness in managing its working capital. Analyzing the reasons behind these variations will provide insights into the company's financial performance and operational strategies.