DexCom Inc (DXCM)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.47 | 2.84 | 1.99 | 5.11 | 5.58 |
| Quick ratio | 0.88 | 1.75 | 1.34 | 3.79 | 4.41 |
| Cash ratio | 0.88 | 1.75 | 1.34 | 3.79 | 4.41 |
DexCom Inc's liquidity ratios indicate the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its current liabilities with its current assets, has shown a decreasing trend from 5.58 in 2020 to 1.47 in 2024. While the current ratio above 1 indicates a healthy liquidity position, the decreasing trend raises concerns about DexCom's ability to meet immediate financial obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also shows a decline from 4.41 in 2020 to 0.88 in 2024. This downward trend suggests that DexCom may face challenges in meeting its short-term obligations without relying on inventory liquidation.
Lastly, the cash ratio, which focuses solely on the company's ability to cover current liabilities with cash and cash equivalents, follows a similar declining pattern as the quick ratio, dropping from 4.41 in 2020 to 0.88 in 2024. This indicates DexCom may have limited cash reserves available to cover its short-term obligations, posing liquidity risks.
Overall, DexCom's liquidity ratios have shown a significant decline over the years, signaling potential challenges in meeting short-term financial obligations. Investors and stakeholders may need to closely monitor the company's liquidity position and management's strategies to address any liquidity concerns.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 126.36 | 153.18 | 109.03 | 169.81 | 132.49 |
The cash conversion cycle of DexCom Inc has exhibited fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle stood at 132.49 days, indicating that it took approximately 132 days for the company to convert its investments in inventory and other resources into cash inflows. By December 31, 2021, this cycle extended to 169.81 days, suggesting a longer duration required for the conversion process.
However, by December 31, 2022, DexCom Inc managed to significantly reduce its cash conversion cycle to 109.03 days, demonstrating improved efficiency in managing its working capital and converting investments into cash. Subsequently, the cycle increased to 153.18 days by December 31, 2023, indicating a temporary setback in the company's cash conversion efficiency.
As of December 31, 2024, the cash conversion cycle decreased to 126.36 days, reflecting a partial recovery towards improved working capital management. Overall, DexCom Inc has experienced variations in its cash conversion cycle over the past five years, suggesting fluctuations in the company's ability to efficiently convert investments into cash inflows.