Biomarin Pharmaceutical Inc (BMRN)

Biomarin Pharmaceutical Inc's liquidity ratios show a fluctuating trend over the past five years. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has decreased from 4.76 in 2020 to 2.51 in 2023, indicating a decline in liquidity. However, the current ratio remains above 1, which suggests that Biomarin Pharmaceutical Inc still has more than enough current assets to cover its current liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown a decreasing trend from 3.07 in 2020 to 1.45 in 2023. This indicates that the company may have fewer liquid assets available to cover its short-term obligations without relying on inventory.

The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has fluctuated over the years. However, it has generally remained above 1, with the lowest value being 0.81 in 2019. This suggests that Biomarin Pharmaceutical Inc has enough cash on hand to cover its short-term liabilities without relying on other current assets.

Overall, while Biomarin Pharmaceutical Inc's liquidity ratios have fluctuated over the years, they generally indicate that the company has maintained a strong liquidity position. However, the declining trend in the current and quick ratios may warrant further monitoring to ensure the company's ability to meet its short-term obligations.

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Additional liquidity measure

Over the past five years, Biomarin Pharmaceutical Inc's cash conversion cycle has displayed fluctuations. The company's cash conversion cycle increased from 772.73 days in 2019 to 882.35 days in 2023. This indicates that it takes Biomarin Pharmaceutical Inc longer to convert its investments in inventory and accounts receivable into cash.

A higher cash conversion cycle suggests inefficiencies in managing inventory, collecting receivables, and paying suppliers. Biomarin Pharmaceutical Inc may be experiencing challenges in efficiently converting its operating cycle into cash flow, which can impact its liquidity and working capital management.

It is important for Biomarin Pharmaceutical Inc to closely monitor and analyze its cash conversion cycle to identify areas for improvement and implement strategies to shorten the cycle. Efforts to streamline operations, optimize inventory levels, improve receivables collection processes, and negotiate favorable payment terms with suppliers can help reduce the cash conversion cycle and enhance the company's overall financial performance.