Collegium Pharmaceutical Inc (COLL)

Collegium Pharmaceutical Inc's liquidity ratios have shown fluctuations over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has decreased from 1.45 in 2020 to 0.95 in 2024, indicating a potential weakening liquidity position.

Similarly, the quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also declined from 0.91 in 2020 to 0.32 in 2024. This trend suggests that the company may be facing challenges in meeting its short-term obligations without relying on inventory sales.

Lastly, the cash ratio, which specifically looks at the company's ability to cover its current liabilities with cash and cash equivalents, has followed a similar downward trajectory from 0.91 in 2020 to 0.32 in 2024. This indicates a decreasing ability to pay off short-term obligations solely with readily available cash.

Overall, the liquidity ratios of Collegium Pharmaceutical Inc have shown a concerning trend of deteriorating liquidity position over the years, which may raise questions about the company's ability to meet its short-term financial commitments. Further analysis and monitoring of liquidity management strategies may be necessary to address these challenges.

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Additional liquidity measure

Collegium Pharmaceutical Inc's cash conversion cycle has shown fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle was at 43.78 days, indicating the time it takes for Collegium Pharmaceutical to convert its investments in inventory and other resources into cash. This metric increased to 50.29 days by December 31, 2021, signaling a longer cycle.

The cash conversion cycle further extended to 66.71 days by December 31, 2022, reaching its peak over the analyzed period. However, the company managed to reduce this cycle to 49.05 days by December 31, 2023, improving its efficiency in managing cash flow.

As of December 31, 2024, Collegium Pharmaceutical Inc's cash conversion cycle stood at 51.08 days. Overall, the fluctuation in the cash conversion cycle may indicate varying efficiencies in inventory management, accounts receivable, and accounts payable processes. Tracking this metric helps to assess the company's liquidity, operational efficiency, and overall financial health.