Lantheus Holdings Inc (LNTH)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 5.80 | 2.74 | 2.61 | 2.29 | 2.62 |
| Quick ratio | 5.33 | 2.54 | 2.08 | 1.66 | 2.06 |
| Cash ratio | 3.81 | 1.68 | 1.09 | 0.99 | 1.41 |
Lantheus Holdings Inc's liquidity ratios have shown a positive trend over the years, indicating improving liquidity position. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has significantly improved from 2.62 in 2019 to 5.80 in 2023. This indicates that the company has more than enough current assets to cover its current liabilities.
Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown a positive trend, increasing from 2.17 in 2019 to 5.42 in 2023. This indicates that Lantheus Holdings Inc has a strong ability to meet its short-term obligations using its most liquid assets.
The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has also improved significantly from 1.52 in 2019 to 3.90 in 2023. This suggests that Lantheus Holdings Inc has a substantial amount of cash on hand to cover its short-term liabilities.
Overall, the increasing trend in all three liquidity ratios reflects a strong liquidity position for Lantheus Holdings Inc, indicating the company's ability to meet its short-term financial obligations and potentially capitalize on opportunities that may arise.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 89.32 | 92.77 | 88.56 | 80.51 | 61.42 |
Lantheus Holdings Inc's cash conversion cycle has shown a slightly decreasing trend over the past five years. In 2023, the company's cash conversion cycle was 94.25 days, down from 98.70 days in 2022 and 98.73 days in 2021. This indicates that the company took less time to convert its inventory and accounts receivable into cash in 2023 compared to the previous two years. However, the cash conversion cycle was longer in 2023 compared to 2020 when it stood at 93.47 days and 2019 when it was 68.11 days.
The cash conversion cycle measures the time it takes for a company to convert its resources into cash flow. A shorter cash conversion cycle generally indicates that the company is efficient in managing its working capital. Despite the slight improvements from 2022 and 2021, Lantheus Holdings Inc may still have room for further enhancement in optimizing its working capital management to potentially shorten its cash conversion cycle further. It is crucial for the company to continue monitoring and improving this metric in order to maintain a healthy cash flow position.