Arrowhead Pharmaceuticals Inc (ARWR)

Arrowhead Pharmaceuticals Inc's liquidity ratios have exhibited fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has shown an increasing trend from 2020 to 2021, followed by a slight decrease in 2022 but then a significant increase in 2023 and 2024. This indicates that the company has been improving its liquidity position, with a current ratio of 6.74 in 2024, suggesting a strong ability to meet its short-term obligations.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has followed a similar trend as the current ratio, showing improvement over the years. The quick ratio of 6.57 in 2024 reflects a robust liquidity position for Arrowhead Pharmaceuticals Inc.

The cash ratio, which is the most conservative liquidity ratio as it considers only cash and cash equivalents to cover current liabilities, has also demonstrated an upward trend, with a slight dip in 2022 but a notable increase in 2023 and 2024. The cash ratio of 6.57 in 2024 suggests that the company has a significant amount of cash on hand relative to its short-term obligations, further indicating a healthy liquidity position.

Overall, Arrowhead Pharmaceuticals Inc's liquidity ratios have shown positive improvements over the years, with a significant strengthening of its liquidity position in 2023 and 2024. This indicates that the company has sufficient resources to meet its short-term financial obligations and fund its operations effectively.

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Additional liquidity measure

The cash conversion cycle of Arrowhead Pharmaceuticals Inc has varied significantly over the past five years. In 2024, the company's cash conversion cycle improved significantly to a negative value of -35.42 days, indicating that the company is able to convert its investments in inventory and accounts receivable back into cash relatively quickly.

In contrast, in 2023, Arrowhead Pharmaceuticals had a much longer cash conversion cycle of -124.63 days, which suggests that the company took a longer time to convert its investments into cash. This improvement in 2024 is a positive sign for the company's working capital management.

Looking back at 2022, the company had a slightly negative cash conversion cycle of -5.65 days, indicating that Arrowhead Pharmaceuticals was efficient in managing its working capital and converting its assets back into cash in a timely manner.

In 2021, the company's cash conversion cycle was positive at 6.23 days, indicating that Arrowhead Pharmaceuticals took slightly longer to convert its investments into cash compared to the previous years. However, this was still a relatively short cash conversion cycle, suggesting efficient working capital management.

In 2020, the cash conversion cycle was -12.65 days, also negative, indicating efficient management of working capital. Overall, Arrowhead Pharmaceuticals has shown varying cash conversion cycle performance over the years, with significant improvements in 2024 compared to 2023. This suggests that the company has been successful in managing its working capital effectively in recent years.