Masimo Corporation (MASI)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.18 | 2.14 | 2.11 | 2.16 | 2.08 | 2.12 | 2.10 | 4.82 | 4.63 | 4.98 | 4.78 | 4.99 | 4.71 | 4.98 | 4.80 | 6.23 | 5.78 | 6.23 | 6.35 | 7.02 |
| Quick ratio | 0.97 | 0.88 | 0.92 | 0.30 | 0.35 | 0.37 | 0.39 | 2.83 | 3.54 | 2.86 | 2.62 | 2.80 | 2.74 | 3.09 | 3.00 | 4.17 | 3.99 | 4.22 | 4.33 | 4.89 |
| Cash ratio | 0.29 | 0.21 | 0.26 | 0.30 | 0.32 | 0.37 | 0.39 | 2.83 | 2.78 | 2.86 | 2.62 | 2.80 | 2.74 | 3.09 | 3.00 | 4.17 | 3.99 | 4.22 | 4.33 | 4.89 |
Masimo Corporation's liquidity ratios have experienced fluctuations over the past few quarters. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has generally been above 2, indicating a healthy level of liquidity. However, there was a notable spike in the current ratio in the first quarter of 2022, reaching 6.23, before decreasing in subsequent quarters.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown variability. While the quick ratio has generally been below 1, indicating potential difficulty in covering immediate liabilities without relying on inventory sales, it saw significant improvements in the first quarter of 2022 and has remained relatively stable since then.
The cash ratio, which is the most conservative liquidity measure focusing solely on cash and cash equivalents compared to current liabilities, has demonstrated a similar trend to the quick ratio. Despite some fluctuations, the cash ratio has generally been at acceptable levels, with a notable spike in the first quarter of 2022.
Overall, Masimo Corporation has maintained a strong liquidity position throughout the observed period, as evidenced by the current, quick, and cash ratios. However, it is essential for the company to continue monitoring and managing its liquidity effectively to ensure it can meet its short-term obligations efficiently.
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 139.53 | 135.95 | 125.25 | 53.06 | 55.52 | 68.19 | 85.85 | 107.42 | 166.41 | 121.25 | 121.49 | 133.55 | 138.37 | 112.73 | 69.06 | 78.07 | 72.52 | 83.05 | 75.82 | 74.82 |
The cash conversion cycle of Masimo Corporation has exhibited fluctuations over the past five years. It measures the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales. A shorter cash conversion cycle indicates improved efficiency in managing working capital.
From March 2019 to March 2020, Masimo Corporation saw a significant decrease in its cash conversion cycle from 83.05 days to 69.06 days, reflecting improved efficiency in converting resources into cash. However, by March 2021, the cycle increased to 133.55 days, indicating a potential slowdown in the company's ability to generate cash from its operations.
The cycle continued to remain elevated throughout 2021, reaching 166.41 days by December 2021. This prolonged cycle suggests that Masimo Corporation may be facing challenges in efficiently managing its working capital, which could impact its liquidity and operational performance.
By the end of 2022 and into the first half of 2023, the cash conversion cycle showed signs of improvement, with a notable decrease to 53.06 days by March 2023. This indicates that the company may have implemented strategies to optimize its working capital management and enhance its cash flow generation.
Overall, Masimo Corporation's cash conversion cycle has shown fluctuations over the years, highlighting the importance of continuous monitoring and improvement in working capital management to ensure operational efficiency and financial stability.