DaVita HealthCare Partners Inc (DVA)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.19 | 1.20 | 1.32 | 1.27 | 1.56 |
| Quick ratio | 1.08 | 1.14 | 1.23 | 1.15 | 1.46 |
| Cash ratio | 0.17 | 0.16 | 0.23 | 0.16 | 0.49 |
DaVita Inc's liquidity ratios indicate its ability to meet short-term obligations effectively. The current ratio has been declining over the past five years, from 1.56 in 2019 to 1.19 in 2023. This trend suggests a potential strain on the company's ability to cover its current liabilities with its current assets.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, also shows a decrease over the years, from 1.47 in 2019 to 1.10 in 2023. This indicates that DaVita may face challenges in meeting its short-term obligations without relying on the sale of inventory.
Furthermore, the cash ratio has fluctuated significantly, reaching its lowest point in 2022 (0.15) and recovering slightly to 0.19 in 2023. This ratio suggests that DaVita has a limited ability to cover its current liabilities solely with cash on hand, which could potentially impact its ability to handle unexpected expenses or short-term financial needs.
In conclusion, DaVita Inc's liquidity ratios have shown a downward trend over the past five years, indicating a potential liquidity challenge that the company may need to address to strengthen its financial position and ability to meet short-term obligations effectively.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 12.26 | 15.39 | 18.40 | 14.36 | 13.31 |
The cash conversion cycle of DaVita Inc has fluctuated over the past five years, indicating changes in its efficiency in managing cash flows related to its operations.
In 2023, the company's cash conversion cycle improved to 72.64 days from 80.19 days in 2022. This suggests that DaVita was able to more efficiently convert its investments in raw materials and other inputs into cash receipts from customers, thereby reducing the number of days required to complete the cycle.
Comparing the data to previous years, DaVita's cash conversion cycle was slightly lower in 2023 compared to 2021 and 2020 but slightly higher than in 2019. This indicates a mixed performance in managing working capital efficiency over the past five years.
Overall, the trend in DaVita's cash conversion cycle shows some variability, indicating the company may have implemented strategies to improve working capital management in certain periods but faced challenges in others. Further analysis of the underlying factors influencing this metric could provide insights into DaVita's operational effectiveness and financial health.