Hims Hers Health Inc (HIMS)

Based on the provided data, we observe the following trends in Hims Hers Health Inc's liquidity ratios:

1. Current Ratio:
- The current ratio, which measures the company's ability to meet short-term liabilities with short-term assets, has shown a decreasing trend over the years. It decreased from 7.43 in 2020 to 1.79 in 2024. This indicates that the company may be becoming less capable of meeting its short-term obligations with its current assets.

2. Quick Ratio:
- The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, follows a similar trend as the current ratio. It decreased from 6.65 in 2020 to 1.38 in 2024. This suggests that the company's ability to cover immediate liabilities with its most liquid assets has been declining.

3. Cash Ratio:
- The cash ratio, which specifically assesses the ability to cover short-term liabilities with cash and cash equivalents, reflects a consistent downward trend. It declined from 6.58 in 2020 to 1.36 in 2024. This trend indicates a potential reduction in the company's cash reserves relative to its short-term obligations.

In summary, the liquidity ratios of Hims Hers Health Inc have been deteriorating over the years, signaling a potential strain on the company's ability to meet its short-term financial commitments. Management may need to closely monitor and manage the company's liquidity position to ensure financial stability and operational continuity.

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Additional liquidity measure

The cash conversion cycle of Hims Hers Health Inc has shown varying trends over the years based on the provided data.

As of December 31, 2020, the company's cash conversion cycle was -39.30 days, indicating that it was able to convert its investments in inventory and accounts receivable into cash relatively quickly.

By December 31, 2021, the cash conversion cycle improved further to -27.44 days, suggesting that the company managed its working capital more efficiently compared to the previous year.

However, by December 31, 2022, the cash conversion cycle increased slightly to -30.65 days, which could indicate a minor slowdown in the efficiency of the company's cash conversion process.

As of December 31, 2023, the cash conversion cycle decreased significantly to -45.09 days, showcasing a notable improvement in the company's ability to convert its operating cycle into cash.

Finally, by December 31, 2024, the cash conversion cycle reverted to a similar level as 2022, standing at -30.68 days, indicating that the company may have faced challenges in maintaining the efficiency of its cash conversion cycle.

Overall, the trend in the cash conversion cycle of Hims Hers Health Inc has been largely negative, with improvements in efficiency seen in some years but followed by fluctuations in other years. Further analysis may be required to understand the specific factors driving these changes.