Amphastar P (AMPH)

The liquidity ratios of Amphastar Pharmaceuticals Inc indicate the company's ability to meet its short-term obligations and easily convert assets into cash if needed.

The current ratio has been fluctuating over the past five years, ranging from 2.17 in 2023 to 3.99 in 2022. A current ratio above 1 indicates that the company has sufficient current assets to cover its current liabilities. However, a significant decrease in the current ratio from 2022 to 2023 may suggest a potential strain on liquidity.

The quick ratio, which measures the company's ability to pay off its current liabilities without relying on the sale of inventory, has also shown variability, with the ratio ranging from 1.56 in 2019 to 2.87 in 2022. A higher quick ratio is generally favorable as it indicates a stronger ability to meet short-term obligations.

The cash ratio, which is the most conservative measure of liquidity, has fluctuated over the years as well, with the ratio ranging from 1.18 in 2023 to 1.93 in 2022. This ratio shows the company's ability to cover its current liabilities solely with cash and cash equivalents.

Overall, while the company's liquidity ratios have shown some variability, reflecting changes in its current assets and liabilities over the years, the trend suggests that Amphastar Pharmaceuticals Inc has generally maintained a healthy liquidity position, with the ability to meet its short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Amphastar Pharmaceuticals Inc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle improved to 165.16 days from 186.20 days in 2022. This indicates that the company took less time to convert its investments in inventory and accounts receivable into cash during 2023, which is a positive sign for its liquidity management.

Comparing to 2021 and 2020, the cash conversion cycle decreased from 173.95 days to 165.16 days, demonstrating a more efficient use of resources in the company's operations. Additionally, in 2019, the cash conversion cycle was at its highest, standing at 215.14 days. Therefore, there has been a significant improvement in the company's efficiency in managing its working capital over the five-year period.

Overall, the decreasing trend in the cash conversion cycle reflects improving efficiency in managing the company's cash flow, inventory, and accounts receivable. This trend indicates that Amphastar Pharmaceuticals Inc has been able to optimize its working capital management, which is essential for maintaining financial health and operational stability.