Masimo Corporation (MASI)

Masimo Corporation's liquidity ratios show fluctuations over the past five years. The current ratio has declined from 5.78 in 2019 to 2.18 in 2023. This ratio indicates a decreasing ability to cover short-term obligations with current assets over the period. The quick ratio experienced significant variability, with a low of 0.35 in 2022 and a high of 4.01 in 2019, implying fluctuations in the firm's ability to meet immediate liabilities without relying on inventory. The cash ratio also fluctuated, ranging from 0.29 in 2023 to 3.99 in 2019, suggesting varying levels of cash availability to cover current liabilities solely with cash on hand. Overall, Masimo Corporation's liquidity position has seen changes, potentially indicating shifts in the firm's ability to meet short-term obligations efficiently.

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Additional liquidity measure

The cash conversion cycle of Masimo Corporation has fluctuated over the past five years. In 2023, the company's cash conversion cycle significantly increased to 130.59 days from the previous year's 53.43 days. This indicates a prolonged period between when Masimo pays its suppliers for inventory and when it receives cash from customers.

In 2021, Masimo experienced a high cash conversion cycle of 166.44 days, indicating inefficiencies in managing its working capital. This was followed by a slight improvement in 2022, with the cycle decreasing to 53.43 days.

However, the most efficient performance was observed in 2019, with a cash conversion cycle of 73.70 days, suggesting the company was able to convert its inventory and receivables into cash relatively quickly.

Overall, Masimo Corporation's cash conversion cycle has shown variability in recent years, with an upward trend in 2023 raising concerns about the company's ability to efficiently manage its working capital and cash flow. Monitoring and analyzing this metric will be crucial for the company's financial health and operational effectiveness.