Catalyst Pharmaceuticals Inc (CPRX)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 2.88 | 5.57 | 7.76 | 7.00 | 4.62 |
| Quick ratio | 2.51 | 5.36 | 7.31 | 6.43 | 4.36 |
| Cash ratio | 1.81 | 5.18 | 7.07 | 6.16 | 3.92 |
Catalyst Pharmaceuticals Inc has shown a consistent trend of strong liquidity over the past five years based on its liquidity ratios. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has been gradually decreasing from 7.76 in 2021 to 2.88 in 2023, but still remains relatively healthy. The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also follows a similar trend, decreasing from 7.31 in 2021 to 2.51 in 2023.
The cash ratio, which is the most conservative measure of liquidity as it considers only cash and cash equivalents to cover short-term liabilities, also displays a decreasing trend from 7.07 in 2021 to 1.81 in 2023. Despite the decline in these ratios over the years, Catalyst Pharmaceuticals Inc maintains a solid liquidity position, indicating its ability to meet its short-term financial obligations without facing significant liquidity issues. Overall, the company's liquidity ratios reflect a prudent management of working capital and suggest a healthy financial position in terms of liquidity.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 50.47 | 28.82 | 43.20 | 20.71 | 22.33 |
The cash conversion cycle of Catalyst Pharmaceuticals Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle increased to 50.47 days from 28.82 days in 2022, indicating a decline in the efficiency of the company's cash management. This increase suggests that Catalyst Pharmaceuticals is taking longer to convert its investments in inventory back into cash.
Comparing to previous years, the cash conversion cycle was also higher in 2021 at 43.20 days, but significantly lower in both 2020 and 2019 at 20.71 and 22.33 days respectively. This suggests that Catalyst Pharmaceuticals was operating with a more efficient cash management system in those years, converting its inventory into cash more quickly.
Overall, the fluctuation in Catalyst Pharmaceuticals Inc's cash conversion cycle indicates varying efficiency in managing cash flows, inventory levels, and accounts receivable over the years. It is important for the company to closely monitor and improve its cash conversion cycle to ensure optimal utilization of resources and maintain financial health.