ICU Medical Inc (ICUI)

ICU Medical, Inc.'s liquidity ratios show a fluctuating trend over the past five years. The current ratio has been consistently above 2, indicating a healthy level of current assets to cover current liabilities. In particular, the current ratio decreased slightly from 2.50 in 2022 to 2.53 in 2023, which implies a slightly improved liquidity position.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also remained above 1 in the last five years. However, there was a slight decline in the quick ratio from 1.09 in 2022 to 1.06 in 2023, potentially signaling a slight decrease in ICU Medical's ability to cover immediate liabilities with its most liquid assets.

The cash ratio, the most conservative liquidity measure that considers only cash and cash equivalents against current liabilities, has shown a fluctuating pattern. Although the cash ratio increased from 0.63 in 2022 to 0.72 in 2023, it remains below 1, indicating that ICU Medical may not have sufficient cash on hand to cover its short-term obligations alone.

Overall, ICU Medical's liquidity ratios suggest a generally healthy liquidity position, as evidenced by current and quick ratios above 1, despite some minor fluctuations. However, the cash ratio falling below 1 in recent years may suggest a potential need for closer monitoring of cash management to ensure the company's ability to meet its short-term obligations.

---

Additional liquidity measure

The cash conversion cycle of ICU Medical, Inc. has fluctuated over the past five years, indicating varying operational efficiencies in managing its cash inflows and outflows.

In 2023, the cash conversion cycle increased to 160.93 days from 146.82 days in 2022, which suggests the company took longer to convert its investments in inventory into cash receipts from sales. This may indicate issues with inventory management or a decrease in the efficiency of accounts receivable collection.

Comparing to 2021 when the cash conversion cycle was 123.05 days, the company's operational efficiency decreased in 2023. This could be a concern as a longer cash conversion cycle ties up cash within the operating cycle, potentially impacting liquidity and working capital management.

The cash conversion cycle was notably higher in 2019 at 155.61 days, indicating improved efficiency in 2023 compared to that year. However, compared to 2020, when it was 146.29 days, the cycle increased in 2023, suggesting a potential deterioration in working capital management during that period.

Overall, ICU Medical, Inc. should closely monitor and potentially improve its cash conversion cycle to ensure optimal utilization of resources and effective management of working capital for sustainable growth and operational performance.