Artivion Inc (AORT)

The liquidity ratios of Artivion Inc indicate the company's ability to meet its short-term obligations.

1. Current Ratio: Artivion Inc has seen fluctuations in its current ratio over the years, ranging from a high of 5.87 in June 2020 to a low of 1.88 in September 2024. Generally, a ratio above 2 is considered healthy, indicating the company has more than enough current assets to cover its current liabilities. Despite some decline in recent periods, the company's current ratio has generally been above 2, showing a strong ability to meet short-term obligations.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more conservative measure of liquidity as it excludes inventory from current assets. Artivion Inc's quick ratio has also varied over time, with a high of 2.57 in June 2020 and a low of 0.37 in September 2024. A quick ratio above 1 indicates the company can cover its current liabilities without relying on inventory sales. The company has generally maintained a quick ratio above 1, suggesting a reasonable ability to meet short-term obligations even when inventory is excluded.

3. Cash Ratio: The cash ratio, which is the most stringent liquidity measure, focuses solely on the ability to cover current liabilities with cash and cash equivalents. Artivion Inc's cash ratio has shown fluctuations, with a high of 2.57 in June 2020 and a low of 0.37 in September 2024. A cash ratio above 1 signifies that the company has enough cash to cover its current liabilities outright. While the company's cash ratio has dipped below 1 in some periods, it generally indicates a reasonable ability to pay off short-term obligations with cash on hand.

In conclusion, based on the liquidity ratios, Artivion Inc appears to have maintained a relatively strong liquidity position overall, with some fluctuations in recent periods. However, the company should continue to monitor and manage its liquidity effectively to ensure it can meet its short-term financial commitments.

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Additional liquidity measure

Artivion Inc's cash conversion cycle has exhibited fluctuations over the reported periods. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally favorable as it implies quicker conversion of investments into cash.

In the recent periods, Artivion Inc's cash conversion cycle has shown a decreasing trend, starting at 214.88 days on March 31, 2020, and reaching its lowest point of 197.28 days on December 31, 2024. The company managed to effectively manage its working capital, leading to faster inventory turnover and collection of receivables.

While the decreasing trend in the cash conversion cycle is generally positive, it's crucial to note that a very low cash conversion cycle may also indicate aggressive management of payables which could affect relationships with suppliers. Therefore, Artivion Inc needs to ensure a balanced approach to managing its working capital to maintain efficient operations while preserving strong vendor relationships.