Jazz Pharmaceuticals PLC (JAZZ)

Based on the data provided, Jazz Pharmaceuticals plc's liquidity ratios have shown a decreasing trend over the past five years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has declined from 4.47 in 2019 to 2.24 in 2023. While the current ratio has remained above 1 (indicating the company can meet its current obligations), the decreasing trend suggests a potential weakening in the company's liquidity position.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also decreased over the years, from 4.26 in 2019 to 1.85 in 2023. This indicates that the company may have reduced ability to meet its short-term obligations without relying on inventory.

Furthermore, the cash ratio, which provides the most conservative measure of liquidity by focusing solely on cash and cash equivalents to cover current liabilities, has also shown a downward trend, dropping from 3.28 in 2019 to 1.39 in 2023. This implies a potential reduction in the company's ability to pay off its immediate liabilities with the cash on hand.

Overall, the declining trend in these liquidity ratios for Jazz Pharmaceuticals plc raises some concerns about its short-term financial health and ability to meet its obligations as they come due. It may be advisable for the company to closely monitor and manage its liquidity position to ensure financial stability in the short term.

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Additional liquidity measure

The cash conversion cycle of Jazz Pharmaceuticals plc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 481.39 days from 485.89 days in 2022, indicating an improvement in the efficiency of its working capital management. This reduction suggests that Jazz Pharmaceuticals is taking less time to convert its investments in inventory and other resources into cash.

Comparing to previous years, Jazz Pharmaceuticals' cash conversion cycle was considerably higher in 2021 at 871.73 days, which could be a concern as it indicates a longer time taken by the company to realize cash from its operations. However, there was a significant improvement from 2021 to 2022 and then again in 2023, which may signify better inventory management or quicker collection of receivables.

In 2020 and 2019, the cash conversion cycle was 229.00 days and 148.73 days, respectively, showing a relatively better performance in those years compared to 2021. Overall, it is essential for Jazz Pharmaceuticals to continue monitoring and managing its cash conversion cycle effectively to ensure optimal utilization of its working capital and overall financial health.