LivaNova PLC (LIVN)

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 2.87 3.37 3.45 3.17 2.95 3.23 3.27 2.86 2.98 2.96 2.93 2.63 0.97 0.98 1.15 2.34 2.29 2.39 2.51 1.16
Quick ratio 1.59 1.68 1.75 1.58 1.44 1.43 1.42 1.24 1.34 1.40 1.08 1.01 0.56 0.58 0.75 1.59 1.41 1.60 1.67 0.66
Cash ratio 1.09 1.07 1.09 0.94 0.80 0.79 0.77 0.68 0.72 0.80 0.41 0.42 0.30 0.30 0.49 0.98 0.82 0.92 0.98 0.24

LivaNova PLC's liquidity ratios demonstrate varying levels of liquidity over the periods analyzed.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, has generally improved from 1.16 as of March 31, 2020, to a peak of 3.45 as of June 30, 2024. This indicates that LivaNova has enhanced its ability to cover its short-term liabilities with its current assets over time. However, the ratio experienced a slight decline in the last quarter of 2024 to 2.87, which may warrant further monitoring.

In terms of the quick ratio, which provides a more stringent measure of liquidity by excluding inventories from current assets, LivaNova also displayed an upward trend from 0.66 on March 31, 2020, to a high of 1.75 on June 30, 2024. This suggests that the company has been able to improve its ability to meet short-term obligations without relying on inventory. Similar to the current ratio, the quick ratio experienced a slight decrease at the end of 2024 to 1.59.

The cash ratio, which specifically assesses the company's ability to cover its current liabilities with cash and cash equivalents, also showed improvement over the years, reaching a peak of 1.09 as of December 31, 2024. This indicates that LivaNova has enhanced its ability to meet its short-term obligations solely through available cash resources.

Overall, LivaNova PLC has generally managed to strengthen its liquidity position over the years as reflected in the increasing current, quick, and cash ratios. However, the slight declines in the ratios towards the end of 2024 may require closer attention to ensure continued liquidity stability.

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 88.93 93.01 92.74 100.03 98.39 106.82 95.12 91.31 90.39 85.01 91.21 89.90 89.49 100.18 98.05 103.14 94.45 131.28 124.52 112.16

The cash conversion cycle for LivaNova PLC has shown fluctuations over the analyzed period. It measures the time taken for the company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is able to efficiently generate cash from its operations.

From March 2020 to December 2024, the cash conversion cycle of LivaNova PLC ranged from a high of 131.28 days in September 2020 to a low of 85.01 days in September 2022. The trend has been somewhat erratic, with periods of lengthening and shortening cycles.

Despite the fluctuations, there have been instances where the company effectively managed its working capital, leading to shorter cash conversion cycles. This could be attributed to improvements in inventory management, accounts receivable collection, and accounts payable payment processes.

Overall, it is important for LivaNova PLC to maintain focus on optimizing its cash conversion cycle to ensure efficient operations and healthy liquidity management. By streamlining processes and managing working capital effectively, the company can strive to reduce the cycle duration and enhance its financial performance in the long run.