Hologic Inc (HOLX)
Liquidity ratios
| Sep 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.69 | 3.97 | 3.89 | 3.47 | 4.42 | 4.41 | 4.21 | 4.12 | 3.91 | 2.97 | 2.74 | 2.39 | 1.65 | 2.57 | 2.46 | 1.79 | 1.47 | 1.31 | 1.57 | 1.68 |
| Quick ratio | 2.83 | 2.97 | 2.92 | 2.77 | 3.54 | 2.69 | 3.32 | 3.21 | 3.11 | 2.41 | 1.94 | 1.59 | 1.21 | 1.96 | 1.97 | 1.40 | 1.09 | 0.94 | 0.92 | 1.17 |
| Cash ratio | 2.25 | 2.29 | 2.17 | 2.26 | 2.84 | 2.73 | 2.59 | 2.53 | 2.39 | 1.76 | 1.11 | 0.88 | 0.57 | 0.79 | 0.82 | 0.57 | 0.55 | 0.54 | 0.37 | 0.56 |
Hologic Inc's liquidity ratios have shown fluctuations over the past few years. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has generally been healthy and above industry averages. There was a significant increase in the current ratio from December 2021 to December 2022, indicating improved liquidity. However, the ratio decreased in the recent quarters, suggesting a slight decline in the company's liquidity position.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also reflects a strong liquidity position for Hologic Inc. The quick ratio has generally been consistent and above 1, indicating that the company has an adequate level of liquid assets to cover its current liabilities without relying on inventory.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents to cover current liabilities, has shown fluctuations over the years. Although the cash ratio has generally been above 1, indicating a sound ability to meet short-term liabilities with cash on hand, there have been periods of lower cash ratios, particularly in the earlier quarters. This suggests that the company may need to enhance its cash reserves for unforeseen circumstances.
Overall, Hologic Inc's liquidity ratios, particularly the current and quick ratios, indicate a strong ability to meet short-term obligations. However, the company should continue to monitor and manage its liquidity position to ensure stability and resilience in the face of uncertain economic conditions.
Additional liquidity measure
| Sep 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 150.76 | 141.86 | 145.96 | 139.09 | 155.46 | 102.09 | 151.32 | 131.26 | 120.01 | 114.53 | 131.22 | 117.80 | 121.76 | 134.24 | 153.00 | 150.41 | 140.35 | 119.66 | 105.03 | 113.26 |
The cash conversion cycle of Hologic Inc, a measure of how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales, has shown some fluctuations over the past few quarters.
The average cash conversion cycle over the reported periods is approximately 134.32 days. This indicates that, on average, it takes Hologic Inc around 134 days to convert its investments in inventory into cash flows from sales.
Analyzing the trend, we observe that the cash conversion cycle has shown some volatility, with periods where it increased (e.g., 155.46 days in June 2023) and decreased (e.g., 102.09 days in March 2023) compared to the average. This suggests potential challenges in managing working capital efficiently in certain quarters.
Overall, a lower cash conversion cycle is typically preferred as it indicates that the company is efficiently managing its inventory and accounts receivable, thereby generating cash flows more quickly. Conversely, a higher cash conversion cycle may indicate inefficiencies in inventory management or difficulties in collecting accounts receivable, potentially leading to constrained cash flows.
It is important for Hologic Inc to monitor its cash conversion cycle consistently and work towards optimizing its working capital management to ensure smooth operations and healthy cash flows in the future.