Amphastar P (AMPH)

Liquidity ratios

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 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 2.17 2.10 1.53 3.86 3.99 3.76 3.64 3.19 3.06 3.10 2.50 2.36 2.49 2.86 2.86 2.96 2.84 3.11 2.81 2.06
Quick ratio 1.65 1.62 1.07 2.78 2.79 2.56 2.55 2.27 2.08 1.97 1.49 1.52 1.53 1.56 1.59 1.50 1.45 1.66 1.70 1.22
Cash ratio 1.14 1.16 0.65 1.83 1.85 1.80 1.77 1.64 1.32 1.17 0.94 0.91 0.94 1.02 1.06 0.80 0.95 1.13 1.22 0.73

Amphastar Pharmaceuticals Inc's liquidity ratios provide insights into the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with current assets, has fluctuated over the quarters. It decreased from 3.99 in Q4 2022 to 1.53 in Q2 2023 before recovering to 2.17 in Q4 2023. While the current ratio has been above 2 for most quarters, indicating good liquidity, the significant fluctuations suggest changes in either current assets or liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also shows a similar trend. It decreased from 2.87 in Q4 2022 to 1.09 in Q2 2023 before improving to 1.69 in Q4 2023. The quick ratio being lower than the current ratio indicates that inventory makes up a significant portion of current assets, which may affect liquidity in the short term.

The cash ratio, the most conservative liquidity measure that only considers cash and cash equivalents, has also followed a similar pattern. It declined from 1.93 in Q4 2022 to 0.68 in Q2 2023 before edging up to 1.18 in Q4 2023. The decreasing trend suggests a lower proportion of cash to cover short-term obligations in the middle quarters of 2023.

Overall, while Amphastar Pharmaceuticals Inc's liquidity ratios have shown some fluctuations, the company generally maintains a strong liquidity position with current ratios consistently above 2. However, the declining trend in the quick and cash ratios in certain quarters indicates a potential need for the company to manage its short-term assets and liabilities more efficiently to ensure continued liquidity in the future.

Additional liquidity measure

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 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 165.16 175.70 188.99 189.22 186.20 179.19 160.51 165.13 173.95 192.43 181.83 202.11 196.96 215.13 209.58 240.57 215.14 214.26 180.66 146.31

The cash conversion cycle for Amphastar Pharmaceuticals Inc has fluctuated over the past eight quarters. It has ranged from a low of 160.51 days in Q2 2022 to a high of 189.22 days in Q1 2023. Generally, the trend has shown an increase in the time it takes for the company to convert its investments in inventory and accounts receivable back into cash, indicating potential challenges in managing working capital efficiently.

A longer cash conversion cycle may suggest inefficiencies in the company's operations, such as slower inventory turnover or longer credit terms given to customers. This can tie up cash resources and impact the company's liquidity and overall financial health.

It would be beneficial for Amphastar Pharmaceuticals Inc to closely monitor its cash conversion cycle and identify areas where improvements can be made to streamline processes and shorten the cycle. This could lead to enhanced cash flow management and improved financial performance in the long run.