Corcept Therapeutics Incorporated (CORT)

Corcept Therapeutics Incorporated has shown a significant decline in its liquidity ratios over the years based on the provided data.

Firstly, looking at the current ratio, it is evident that the company's ability to cover its short-term obligations with its current assets has decreased from 49.67 in 2020 to 3.35 in 2024. This could indicate potential issues in meeting its short-term liabilities as the ratio has decreased substantially.

Secondly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also shows a similar downward trend from 79.72 in 2020 to 2.72 in 2024. This suggests a significant reduction in the company's ability to meet its short-term obligations without relying on the sale of inventory.

Lastly, the cash ratio, which specifically focuses on the company's ability to cover its current liabilities with cash and cash equivalents, has decreased from 79.72 in 2020 to 2.72 in 2024. This sharp decline indicates a diminishing capacity to pay off short-term obligations using readily available cash resources.

In summary, the decreasing trends in all three liquidity ratios suggest a potential liquidity risk for Corcept Therapeutics Incorporated, as the company's ability to meet its short-term financial obligations has significantly weakened over the years. It may be important for the company to closely monitor its liquidity position and consider implementing strategies to improve its liquidity position to ensure financial stability in the future.

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Additional liquidity measure

The cash conversion cycle of Corcept Therapeutics Incorporated has shown a decreasing trend over the years, indicating a more efficient management of its working capital.

As of December 31, 2020, the cash conversion cycle stood at 1,383.43 days, reflecting a prolonged period for the company to convert its resources into cash. However, by December 31, 2024, the cash conversion cycle had decreased significantly to 416.32 days, showcasing a notable improvement in the company's ability to convert its investments in inventory and receivables into cash.

This reduction in the cash conversion cycle suggests that Corcept Therapeutics has been successful in streamlining its operations, managing its inventory levels, and optimizing its accounts receivable collection process. A shorter cash conversion cycle indicates that the company is more efficient in generating cash from its core business activities, which can lead to improved liquidity and overall financial performance.