Inspire Medical Systems Inc (INSP)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 7.13 | 7.84 | 9.25 | 7.93 | 7.60 | 8.14 | 8.40 | 8.91 | 8.66 | 10.05 | 5.62 | 6.08 | 6.50 | 7.61 | 10.25 | 13.43 | 13.02 | 14.67 | 20.48 | 11.33 |
| Quick ratio | 6.09 | 6.74 | 7.91 | 7.12 | 7.05 | 7.65 | 7.96 | 8.55 | 8.38 | 9.66 | 5.05 | 5.51 | 6.02 | 7.05 | 9.56 | 12.76 | 12.52 | 14.05 | 19.38 | 10.70 |
| Cash ratio | 5.03 | 5.53 | 6.70 | 6.12 | 5.89 | 6.63 | 7.00 | 7.55 | 7.38 | 8.67 | 4.19 | 4.71 | 5.19 | 6.26 | 8.54 | 11.64 | 11.31 | 12.89 | 18.60 | 9.89 |
Inspire Medical Systems Inc's liquidity ratios indicate the company's ability to meet its short-term obligations.
1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its current assets. Inspire Medical Systems Inc's current ratio has shown fluctuations over the years, ranging from a high of 20.48 in June 2020 to a low of 5.62 in June 2022. Overall, the current ratio has generally remained above 1, indicating that the company has more than enough current assets to cover its short-term liabilities.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. Inspire Medical Systems Inc's quick ratio has followed a similar trend to the current ratio, displaying fluctuations but generally staying above 1. This ratio helps assess the company's ability to meet short-term obligations without relying on selling inventory.
3. Cash Ratio: The cash ratio is the most conservative liquidity ratio, focusing solely on the company's ability to cover its current liabilities with cash and cash equivalents. Inspire Medical Systems Inc's cash ratio has also varied but has consistently remained above 1, indicating a strong ability to meet short-term obligations solely with cash on hand.
In conclusion, based on the analysis of these liquidity ratios, Inspire Medical Systems Inc appears to have maintained a healthy liquidity position over the years, with sufficient current assets and cash reserves to meet its short-term financial obligations.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 65.25 | 62.19 | 56.53 | 43.19 | 49.23 | 36.28 | 30.12 | 29.83 | 40.97 | 45.92 | 56.18 | 55.46 | 62.52 | 57.75 | 60.88 | 64.66 | 83.56 | 87.94 | 68.53 | 56.94 |
The cash conversion cycle of Inspire Medical Systems Inc has shown fluctuations over the past several quarters. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In the most recent quarter, the cash conversion cycle for Inspire Medical Systems Inc stood at 65.25 days as of December 31, 2024. This indicates that the company takes approximately 65.25 days to convert its investments in inventory into cash from sales.
Looking at the trend over the quarters, there has been a general fluctuation in the cash conversion cycle. The cycle peaked at 87.94 days on September 30, 2020, and has since shown a downward trend, reaching a low of 29.83 days on March 31, 2023, before picking up again.
A decreasing cash conversion cycle can suggest that the company is managing its working capital more efficiently, potentially leading to improved cash flows. Conversely, an increasing cycle may indicate inefficiencies in managing inventory, accounts receivable, and accounts payable.
It would be beneficial for Inspire Medical Systems Inc to closely monitor its cash conversion cycle to ensure optimal working capital management, enhance liquidity, and sustain healthy cash flows in the long term.