Cytek Biosciences Inc (CTKB)

Cytek Biosciences Inc's liquidity ratios have shown a decreasing trend over the past three years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, decreased from 13.01 in 2021 to 9.26 in 2022 and further to 6.97 in 2023. This indicates a decline in the company's ability to meet its short-term obligations.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, decreased from 11.89 in 2021 to 7.95 in 2022 and further to 5.66 in 2023. This also points to a weakening liquidity position as the company's ability to cover immediate liabilities with its most liquid assets has decreased.

The cash ratio, which is the most conservative liquidity measure focusing solely on cash and cash equivalents to cover current liabilities, also saw a decline from 10.99 in 2021 to 6.96 in 2022 and further to 4.67 in 2023. This indicates a decreasing ability of Cytek Biosciences Inc to meet its short-term obligations with the most liquid assets.

Overall, the declining trend in all three liquidity ratios suggests a potential liquidity risk for Cytek Biosciences Inc, as the company may face challenges in meeting its short-term financial obligations with its current asset base. Further investigation and proactive management of working capital may be necessary to address these liquidity concerns.

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Additional liquidity measure

The cash conversion cycle is a measure of how efficiently a company manages its working capital, indicating the time it takes to convert its investments in raw materials and other inputs into cash received from sales. In the case of Cytek Biosciences Inc, the cash conversion cycle has fluctuated significantly over the past three years.

On December 31, 2023, Cytek Biosciences Inc had a cash conversion cycle of 358.35 days, representing a substantial improvement from the previous year. This indicates that the company was able to more efficiently convert its inventory into sales and ultimately into cash during the year.

In contrast, on December 31, 2022, the cash conversion cycle was significantly higher at 6,270.26 days, indicating that Cytek Biosciences Inc struggled with managing working capital efficiently during that period. This extended cycle may have been due to delays in converting inventory into sales and collecting cash from customers, which can negatively impact the company's liquidity and overall financial stability.

Similarly, on December 31, 2021, the cash conversion cycle was 4,980.47 days, which was also relatively high compared to the latest year. This suggests that Cytek Biosciences Inc faced challenges in managing its working capital effectively during that period as well.

In conclusion, the significant fluctuations in Cytek Biosciences Inc's cash conversion cycle over the past three years indicate varying levels of efficiency in managing working capital and converting investments into cash. It is important for the company to focus on improving this metric to enhance its financial health and operational performance.