Merit Medical Systems Inc (MMSI)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 5.45 | 2.40 | 2.04 | 2.32 | 2.50 |
| Quick ratio | 3.81 | 1.07 | 1.01 | 1.14 | 1.15 |
| Cash ratio | 2.88 | 0.26 | 0.29 | 0.31 | 0.24 |
The liquidity ratios of Merit Medical Systems, Inc. have shown a positive 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 improved steadily, reaching a high of 5.45 in 2023 from 2.50 in 2019. This indicates that the company has a strong liquidity position and is well-positioned to meet its short-term obligations.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown significant improvement over the years. The quick ratio increased to 3.95 in 2023, reflecting the company's ability to cover its short-term liabilities without relying on inventory.
Furthermore, the cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has also seen a substantial increase over the years. The cash ratio rose to 3.02 in 2023, indicating that the company holds a significant amount of cash relative to its short-term obligations.
Overall, the liquidity ratios of Merit Medical Systems, Inc. demonstrate a strong and improving liquidity position, suggesting that the company is well-equipped to meet its short-term financial commitments.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 134.28 | 127.04 | 119.64 | 115.37 | 125.09 |
The cash conversion cycle for Merit Medical Systems, Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 183.88 days compared to 170.67 days in 2022, indicating that it took the company longer to convert its investments in inventory and receivables into cash.
In 2021 and 2020, the cash conversion cycle was 161.68 days and 155.94 days, respectively, showing an improving trend in the efficiency of the company's working capital management. However, in 2019, the cash conversion cycle was relatively high at 172.84 days.
Overall, a longer cash conversion cycle may indicate inefficiencies in managing inventory, collecting receivables, or paying suppliers. The company should focus on optimizing its working capital processes to reduce the cash conversion cycle and improve its liquidity position.