Globus Medical (GMED)

Globus Medical Inc's liquidity ratios indicate the company's ability to meet its short-term obligations efficiently. The current ratio has shown a decreasing trend from 6.17 in 2021 to 4.88 in 2023, which suggests that the company may have slightly reduced its short-term asset coverage for liabilities over the years. However, the current ratio remains above 1, indicating a healthy liquidity position.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown a decreasing trend from 4.48 in 2021 to 2.72 in 2023. This indicates that the company may have reduced its ability to cover immediate liabilities with its most liquid assets.

On the other hand, the cash ratio has also shown a decreasing trend from 3.30 in 2021 to 1.44 in 2023. This indicates a possible reduction in the company's ability to cover short-term liabilities solely with cash and cash equivalents.

Overall, while the liquidity ratios of Globus Medical Inc have experienced a decline over the years, they continue to indicate a strong ability to meet short-term obligations. However, the decreasing trend may warrant closer monitoring of the company's liquidity position to ensure continued financial stability.

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Additional liquidity measure

The cash conversion cycle for Globus Medical Inc has exhibited fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 644.10 days from 439.93 days in 2022, indicating a significant lengthening of the cycle. This suggests that it took longer for the company to convert its investments in inventory and accounts receivable into cash during the year.

Comparing to 2021, the cash conversion cycle increased from 390.76 days, showing a deterioration in the efficiency of Globus Medical's cash conversion process. However, when compared to 2020 and 2019, the cash conversion cycle in 2023 is slightly lower than those years, indicating some improvement in managing the conversion of working capital into cash.

Overall, the upward trend in the cash conversion cycle suggests potential challenges in managing working capital efficiently, which may impact liquidity and cash flow performance for Globus Medical Inc. Further analysis of the components contributing to this cycle, such as inventory turnover and accounts receivable collection period, would provide more insights into the company's operational efficiency and financial health.