Astrana Health Inc (ASTH)

Astrana Health Inc's liquidity ratios provide insights into the company's ability to meet its short-term obligations.

1. Current Ratio: This ratio measures the company's ability to pay off its short-term liabilities with its current assets. Astrana Health Inc's current ratio has shown a consistent trend over the years, starting at 2.94 in 2020 and increasing to 3.53 in 2021 before declining to 2.11 in 2023 and further dropping to 1.43 in 2024. While a current ratio above 1 indicates that the company has more current assets than liabilities, a decreasing trend may indicate potential liquidity concerns in the future.

2. Quick Ratio: Also known as the acid-test ratio, this ratio provides a more conservative measure of liquidity by excluding inventory from current assets. Astrana Health Inc's quick ratio has followed a similar trend to the current ratio, starting at 2.27 in 2020, increasing to 2.50 in 2021, and then decreasing to 0.72 in 2024. The declining trend in the quick ratio suggests that the company may have difficulty meeting its immediate cash obligations without relying on inventory.

3. Cash Ratio: This ratio is the most conservative measure of liquidity, focusing solely on the company's ability to cover its current liabilities with cash and cash equivalents. Astrana Health Inc's cash ratio has mirrored the trend seen in the quick ratio, starting at 2.27 in 2020 and decreasing to 0.72 in 2024. A decreasing cash ratio may indicate a potential cash flow issue or difficulty in meeting short-term obligations with cash on hand.

Overall, the decreasing trends in Astrana Health Inc's liquidity ratios, particularly the quick and cash ratios, indicate potential liquidity challenges that the company may need to address in the future to ensure its financial health and ability to meet its short-term obligations.

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Additional liquidity measure

Based on the provided data, Astrana Health Inc has consistently maintained a cash conversion cycle of 0.00 days from December 31, 2020, to December 31, 2024.

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A lower or zero cash conversion cycle indicates that the company efficiently manages its working capital, ensures prompt payments from customers, and optimizes inventory turnover.

A cash conversion cycle of 0.00 days suggests that Astrana Health Inc is effectively managing its cash flow, inventory, and accounts receivable, potentially leading to improved liquidity and overall financial health. This efficient management of working capital could contribute to the company's ability to meet its financial obligations, invest in growth opportunities, and generate value for its stakeholders.