Artivion Inc (AORT)

Artivion Inc's liquidity ratios provide insights into the company's ability to meet its short-term obligations. The current ratio, which measures short-term liquidity by comparing current assets to current liabilities, has shown a positive trend over the years, with values of 3.88 in 2020, 5.51 in 2021, 4.98 in 2022, 4.85 in 2023, and 4.34 in 2024. This indicates that the company has had a strong ability to cover its current liabilities with its current assets, although there has been a slight decrease in 2024.

The quick ratio (acid-test ratio), which provides a more stringent measure of liquidity by excluding inventory from current assets, also shows variability over the years. The ratios were 1.03 in 2020, 1.22 in 2021, 0.79 in 2022, 1.02 in 2023, and 0.80 in 2024. A quick ratio below 1 indicates potential issues with liquidity, and while the company maintained ratios above 1 in most years, the decreasing trend from 2021 to 2024 warrants monitoring.

The cash ratio, which is the most conservative of the three liquidity ratios and measures the ability to cover current liabilities with cash and cash equivalents, also reflects a similar pattern to the quick ratio. The ratios were 1.03 in 2020, 1.22 in 2021, 0.79 in 2022, 1.02 in 2023, and 0.80 in 2024. A higher cash ratio is usually preferred as it signifies a stronger ability to meet short-term obligations using cash on hand.

Overall, while Artivion Inc has shown a generally strong liquidity position based on the current ratio, there are concerns regarding the downward trend in the quick and cash ratios, indicating a potential need to closely monitor the company's ability to meet its short-term obligations in the future.

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Additional liquidity measure

The cash conversion cycle of Artivion Inc has shown a decreasing trend over the past five years. On December 31, 2020, the cash conversion cycle stood at 312.01 days, indicating that it took the company approximately 312 days to convert its investments in inventory and other resources back into cash flow from sales.

However, by December 31, 2024, the cash conversion cycle had decreased to 208.32 days, reflecting an improvement in the efficiency of Artivion Inc's working capital management. This indicates that the company has been able to better manage its inventory levels, accounts receivable, and accounts payable, resulting in a shorter period for cash to cycle through the business.

Overall, the decreasing trend in the cash conversion cycle suggests that Artivion Inc has been more effective in optimizing its cash flow and improving operational efficiency over the years, which could lead to improved liquidity and financial performance in the long run.