Alkermes Plc (ALKS)
Liquidity ratios
| 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.45 | 2.99 | 3.20 | 2.86 | 2.91 | 2.87 | 2.25 | 2.27 | 2.24 | 2.39 | 2.19 | 2.25 | 2.32 | 2.71 | 2.75 | 2.53 | 2.71 | 2.95 | 2.69 | 2.46 |
| Quick ratio | 2.81 | 2.41 | 2.31 | 2.13 | 2.44 | 2.39 | 1.76 | 1.80 | 1.78 | 1.89 | 1.68 | 1.80 | 1.88 | 2.18 | 2.14 | 2.08 | 2.21 | 2.40 | 2.19 | 2.03 |
| Cash ratio | 2.00 | 1.70 | 1.62 | 1.49 | 1.77 | 1.70 | 1.22 | 1.22 | 1.24 | 1.32 | 1.14 | 1.14 | 1.24 | 1.40 | 1.48 | 1.45 | 1.51 | 1.66 | 1.46 | 1.37 |
Alkermes Plc has shown a consistent improvement in its liquidity ratios over the past five quarters. The current ratio, which indicates the company's ability to cover its short-term liabilities with its current assets, has been steadily increasing, reaching 3.45 in September 2024 from 2.46 in December 2019. This trend suggests that Alkermes Plc has a strong ability to meet its short-term obligations.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also shown improvement, reaching 2.81 in September 2024. This indicates that the company has a solid ability to meet its short-term liabilities without relying on selling its inventory.
Furthermore, the cash ratio, which provides an even more conservative measure of liquidity by only considering cash and cash equivalents, has been increasing as well, reaching 2.00 in September 2024. This indicates that Alkermes Plc has a strong ability to cover its current liabilities with its readily available cash resources.
Overall, Alkermes Plc's liquidity ratios have been consistently improving, reflecting a strong financial position and the company's ability to meet its short-term obligations comfortably.
Additional liquidity measure
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 171.46 | 135.35 | 125.33 | 131.18 | 117.47 | 124.74 | 149.33 | 158.64 | 140.04 | 126.98 | 132.48 | 141.73 | 142.34 | 149.17 | 134.01 | 135.72 | 109.09 | 115.80 | 115.47 | 109.02 |
The cash conversion cycle of Alkermes Plc has varied over the past years, with fluctuations in the number of days it takes for the company to convert its investments in inventory and other resources into cash flows. A shorter cash conversion cycle is generally a positive indicator as it suggests that the company is managing its working capital more efficiently.
In the recent period, from September 2023 to September 2024, Alkermes Plc experienced an increasing trend in the cash conversion cycle. It rose from 117.47 days to 171.46 days, indicating a potential deterioration in the efficiency of their working capital management. A longer cash conversion cycle may imply that the company is taking longer to sell its inventory, collect receivables, or pay off its payables.
Further analysis of the components of the cash conversion cycle, including days inventory outstanding (DIO), days sales outstanding (DSO), and days payables outstanding (DPO), would provide additional insights into the specific areas contributing to the overall trend in the cash conversion cycle. Alkermes Plc should monitor and potentially optimize these components to shorten the cash conversion cycle, improve liquidity, and enhance overall financial performance.