Intuitive Surgical Inc (ISRG)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 4.76 | 4.40 | 5.08 | 6.86 | 4.53 |
| Quick ratio | 3.83 | 3.56 | 4.36 | 6.03 | 3.75 |
| Cash ratio | 3.15 | 2.90 | 3.68 | 5.36 | 3.13 |
Intuitive Surgical Inc's liquidity position, as reflected by its current, quick, and cash ratios, has consistently been strong over the past five years. The current ratio, which measures the company's ability to pay off its short-term obligations using its current assets, has shown a generally increasing trend from 2019 to 2021, with a slight decline in 2022 and a significant increase in 2023. This indicates that the company has ample current assets to cover its current liabilities.
The quick ratio, a more stringent measure of liquidity than the current ratio as it excludes inventories from current assets, also demonstrates a similar improvement trend over the years, reflecting the company's ability to meet its short-term obligations without relying on selling inventory.
Furthermore, the cash ratio, the most conservative measure of liquidity that considers only cash and cash equivalents in relation to current liabilities, has consistently remained at healthy levels, indicating Intuitive Surgical's strong ability to meet its immediate financial obligations with readily available cash resources.
Overall, the liquidity ratios of Intuitive Surgical Inc suggest a robust financial position with ample liquidity to support its operations and meet its short-term obligations comfortably.
See also:
Intuitive Surgical Inc Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 140.18 | 124.30 | 100.25 | 120.50 | 117.90 |
The cash conversion cycle of Intuitive Surgical Inc has exhibited fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 215.19 days from 189.69 days in 2022, indicating a lengthening of the time it takes the company to convert its investments in inventory and accounts receivable into cash from sales. This rise may raise concerns about the company's efficiency in managing its working capital.
Comparing to 2021, where the cash conversion cycle was 147.12 days, the significant increase in 2023 suggests a potential decline in operating efficiency. It is essential for the company to closely monitor its inventory turnover and collection period for accounts receivable to optimize its cash conversion cycle and manage its liquidity effectively.
Looking back at 2020 and 2019, we see that the company experienced fluctuations in the cash conversion cycle, with values of 180.80 days and 178.49 days, respectively. These variations signify the company's ongoing efforts to improve its working capital management practices.
In conclusion, the trend in Intuitive Surgical Inc's cash conversion cycle indicates the need for the company to focus on streamlining its working capital processes to enhance operational efficiency and maintain a healthy liquidity position.