Catalyst Pharmaceuticals Inc (CPRX)

Catalyst Pharmaceuticals Inc's liquidity ratios indicate a strong ability to meet short-term obligations with its current assets. The current ratio, which measures the company's ability to cover its current liabilities with its current assets, has shown fluctuations over the reporting periods but generally remained at healthy levels, ranging from 5.57 to 11.19. A current ratio above 1 indicates that the company has more than enough current assets to cover its current liabilities.

The quick ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets, also reflects the company's strong liquidity position. The quick ratio ranges from 1.81 to 9.93, indicating that Catalyst Pharmaceuticals Inc can meet its short-term obligations even if its inventory is excluded from the calculation.

The cash ratio, focusing solely on the most liquid assets like cash and equivalents, reveals the firm's ability to settle its current liabilities using its cash reserves. The cash ratio ranges from 1.81 to 9.93, suggesting that the company has a significant amount of highly liquid assets to cover its short-term obligations.

In conclusion, Catalyst Pharmaceuticals Inc displays a robust liquidity position based on its current, quick, and cash ratios, indicating its ability to meet its short-term financial commitments effectively.

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Additional liquidity measure

The cash conversion cycle of Catalyst Pharmaceuticals Inc has exhibited fluctuations over the years, indicating changes in the efficiency of the company's cash management. The cycle started at 46.92 days as of March 31, 2020, decreased to 39.07 days by June 30, 2020, which reflected an improvement in the conversion of cash invested in inventory back into cash.

However, the cycle lengthened significantly to 104.60 days by September 30, 2020, and remained elevated at 99.63 days by December 31, 2020, suggesting potential challenges in managing working capital effectively during that period. Subsequently, there was a slight improvement to 91.20 days by March 31, 2021, but the cycle increased sharply to 144.11 days by June 30, 2021, which may indicate issues with inventory turnover or collection of receivables.

The cycle then fluctuated between 85.22 days and 131.26 days from September 30, 2021, to December 31, 2021, before declining to 72.22 days by December 31, 2022, indicating a more efficient cash conversion process during that period. However, by March 31, 2023, the cycle increased to 98.04 days, suggesting potential difficulties in managing cash flows and working capital.

Subsequent periods saw improvements in the cash conversion cycle, with a decrease to 69.64 days by September 30, 2023, and varying between 86.17 days and 114.51 days in the following quarters. Overall, the trend shows fluctuations in the efficiency of Catalyst Pharmaceuticals Inc's cash management, with periods of improvement and challenges in converting cash invested in operations back into cash. It is crucial for the company to consistently monitor and optimize its cash conversion cycle to ensure optimal working capital management and sustainable financial performance.