Halozyme Therapeutics Inc (HALO)

The liquidity ratios of Halozyme Therapeutics Inc have shown significant improvement over the years.

- The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has increased steadily from 1.32 in 2020 to 7.80 in 2024. This indicates that the company has substantially more current assets than current liabilities, suggesting a strong liquidity position.

- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Halozyme's quick ratio has also shown a strong upward trend, from 0.87 in 2020 to 4.29 in 2024. This indicates that the company has ample liquid assets to cover its short-term liabilities without relying on selling inventory.

- The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has followed the same upward trend as the quick ratio, reflecting an improvement in the company's ability to meet its immediate financial obligations using cash on hand.

Overall, the liquidity ratios of Halozyme Therapeutics Inc demonstrate a favorable liquidity position, with increasing levels of current assets relative to current liabilities over the years, indicating improved financial health and agility to meet its short-term obligations.

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Additional liquidity measure

The cash conversion cycle of Halozyme Therapeutics Inc has fluctuated over the past five years. In December 2020, the company's cash conversion cycle stood at 511.28 days, indicating a lengthy period for the company to convert its investments in inventory and other resources into cash inflows. However, there was a significant improvement by the end of 2021, with the cash conversion cycle decreasing to 241.69 days, suggesting better efficiency in managing working capital.

Subsequently, in 2022 and 2023, the cash conversion cycle slightly increased to 262.34 days and 242.12 days, respectively. The company maintained a relatively stable performance in converting its resources into cash during these years. However, in December 2024, there was a notable increase in the cash conversion cycle to 324.80 days, indicating a potential slowdown in the company's ability to generate cash from its operating activities.

Overall, while there have been fluctuations in Halozyme Therapeutics Inc's cash conversion cycle over the years, the company witnessed a significant improvement in 2021 before facing challenges in 2024. Monitoring and managing the cash conversion cycle effectively will be crucial for the company to optimize its working capital efficiency and financial performance.