Globus Medical (GMED)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 4.88 | 4.47 | 7.80 | 6.39 | 6.18 | 6.33 | 6.10 | 6.48 | 6.17 | 8.00 | 6.86 | 6.58 | 6.80 | 8.12 | 6.57 | 6.55 | 6.17 | 6.71 | 6.94 | 7.77 |
| Quick ratio | 2.74 | 2.69 | 7.48 | 6.07 | 6.02 | 6.09 | 5.92 | 4.55 | 4.35 | 5.96 | 4.96 | 4.58 | 4.76 | 5.61 | 4.27 | 4.24 | 4.25 | 4.58 | 4.72 | 5.80 |
| Cash ratio | 1.45 | 1.54 | 5.92 | 4.72 | 4.66 | 4.66 | 4.56 | 3.35 | 3.16 | 4.51 | 3.54 | 3.26 | 3.53 | 4.10 | 2.98 | 2.83 | 2.79 | 2.92 | 2.86 | 4.03 |
Globus Medical Inc's liquidity ratios show a consistent trend of strong liquidity position over the quarters. The current ratio has remained above 4 in all quarters, indicating that the company has more than enough current assets to cover its short-term liabilities. The ratio peaked at 7.80 in Q2 2023, showing a significant increase in liquidity at that point.
The quick ratio, which excludes inventory from current assets, also demonstrates strong liquidity levels above 2 in all quarters. This ratio provides a more conservative measure of liquidity than the current ratio and indicates the company's ability to meet its short-term obligations without relying on inventory.
The cash ratio, which is the most stringent liquidity measure, has also been robust for Globus Medical Inc, consistently above 1 in all quarters. This signifies that the company holds sufficient cash and cash equivalents to cover its current liabilities without relying on other current assets.
Overall, Globus Medical Inc maintains a solid liquidity position as evidenced by its strong current, quick, and cash ratios. This indicates the company's ability to meet its short-term financial obligations without facing significant liquidity constraints.
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 644.48 | 992.75 | 469.15 | 449.81 | 441.38 | 434.80 | 415.65 | 406.13 | 391.22 | 395.84 | 396.39 | 414.00 | 422.57 | 430.74 | 437.28 | 423.41 | 423.70 | 410.38 | 398.38 | 335.70 |
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Globus Medical Inc's cash conversion cycle has fluctuated over the past eight quarters, ranging from 404.76 days in Q1 2022 to a peak of 992.24 days in Q3 2023.
A longer cash conversion cycle suggests that the company is taking more time to sell its inventory or collect revenue from its sales, which can tie up cash and impact liquidity. Conversely, a shorter cash conversion cycle indicates that the company is able to efficiently convert its investments into cash, potentially improving cash flows and working capital management.
It is worth noting that the significant increase in the cash conversion cycle in Q3 2023 compared to previous quarters warrants further investigation. Management should analyze the underlying factors contributing to this increase and take appropriate actions to optimize the company's working capital efficiency. Overall, monitoring the cash conversion cycle is important for assessing Globus Medical Inc's operational efficiency and cash flow management.