Alkermes Plc (ALKS)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 3.04 | 2.86 | 2.27 | 2.25 | 2.53 |
| Quick ratio | 2.44 | 2.13 | 1.80 | 1.80 | 2.08 |
| Cash ratio | 1.62 | 1.49 | 1.22 | 1.14 | 1.45 |
Alkermes Plc's liquidity ratios have shown a generally positive trend over the past five years. The current ratio, which compares current assets to current liabilities, has remained consistently above 2, indicating the company's ability to meet its short-term obligations with its current assets.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also been comfortably above 1 in each of the years, showing that Alkermes Plc has a strong ability to meet its immediate liabilities without relying on selling inventory.
Furthermore, the cash ratio, which measures a company's ability to cover its short-term liabilities with its most liquid assets (cash and equivalents), has also demonstrated an improving trend, starting at 1.45 in 2020 and increasing to 1.62 in 2024. This suggests that the company has a sufficient amount of cash on hand to cover its short-term obligations.
Overall, based on the liquidity ratios, Alkermes Plc appears to have a healthy liquidity position, with a consistent ability to meet its short-term financial commitments and maintain operational stability.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 146.34 | 118.77 | 158.64 | 141.73 | 135.71 |
The cash conversion cycle for Alkermes Plc has fluctuated over the years. As of December 31, 2020, the company had a cash conversion cycle of 135.71 days, which increased to 141.73 days by December 31, 2021. Subsequently, the cash conversion cycle extended further to 158.64 days by December 31, 2022. However, the company showed an improvement in efficiency by reducing the cash conversion cycle to 118.77 days by December 31, 2023, before rising again to 146.34 days by December 31, 2024.
Overall, the cash conversion cycle of Alkermes Plc has shown some volatility over the years, indicating variability in the company's ability to convert its resources and investments into cash effectively. Further analysis would be necessary to understand the underlying reasons for these fluctuations and to assess the impact on the company's liquidity and operational efficiency.