Halozyme Therapeutics Inc (HALO)

Based on the provided data for Halozyme Therapeutics Inc, let's analyze the liquidity ratios:

1. Current Ratio:
The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. A current ratio above 1 indicates the company has more current assets than liabilities, reflecting good liquidity. Halozyme's current ratio fluctuated over the period, ranging from a high of 19.19 in June 2020 to a low of 1.32 in December 2020. Generally, a higher current ratio is favorable, and while the company showed significant fluctuations, it generally maintained a current ratio above 1, suggesting sufficient liquidity to cover short-term obligations.

2. Quick Ratio:
The quick ratio assesses the company's ability to meet short-term obligations using only its most liquid assets (excluding inventory). Similar to the current ratio, a quick ratio above 1 signifies good liquidity. Halozyme's quick ratio displayed similar fluctuations as the current ratio, with a peak of 14.78 in June 2020 and a low of 0.87 in December 2020. Although there were periods of lower quick ratios, the company generally maintained a quick ratio above 1, implying a reasonable ability to meet short-term liabilities without relying heavily on inventory.

3. Cash Ratio:
The cash ratio is the most conservative liquidity measure, focusing solely on the company's ability to cover short-term liabilities with cash and cash equivalents. Halozyme's cash ratio followed a similar pattern to the quick ratio, confirming the company's ability to settle immediate obligations with its cash holdings. The cash ratio values were generally aligned with the quick ratio, indicating that Halozyme consistently maintained a solid cash position to cover short-term liabilities throughout the period.

In summary, while Halozyme Therapeutics Inc experienced fluctuations in its liquidity ratios over the analyzed period, the company generally exhibited a satisfactory ability to meet its short-term financial obligations and maintain liquidity. Monitoring these ratios closely can provide insights into the company's financial health and ability to manage its short-term liquidity needs effectively.

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Additional liquidity measure

The cash conversion cycle (CCC) of Halozyme Therapeutics Inc has shown fluctuations over the analyzed period. In March 2020, the CCC stood at 324.09 days, indicating it took the company over 10 months to convert its investments in inventory and accounts receivable into cash. This figure increased to 623.39 days by September 2020, suggesting a worsening liquidity position. However, the company managed to significantly reduce its CCC to 220.34 days by March 2022, indicating an improvement in its cash conversion efficiency.

Subsequently, the CCC fluctuated between 220.34 days and 395.70 days up to June 2024, suggesting some variability in the company's working capital management. Notably, the CCC decreased to 233.77 days by September 2024, indicating a positive trend in converting its resources into cash more efficiently. Overall, the fluctuations in Halozyme Therapeutics Inc's CCC highlight the importance of effective working capital management in optimizing cash flow and liquidity.