Molina Healthcare Inc (MOH)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.54 | 1.47 | 1.43 | 1.59 | 1.83 |
| Quick ratio | 1.49 | 1.43 | 1.39 | 1.55 | 1.78 |
| Cash ratio | 1.11 | 1.09 | 1.08 | 1.21 | 1.35 |
Molina Healthcare Inc's liquidity ratios provide insights into its ability to meet short-term obligations. The current ratio, which indicates the firm's ability to cover short-term liabilities with current assets, has shown a fluctuating trend over the past five years. In 2023, the current ratio was 1.54, slightly higher than the previous year, suggesting an improved short-term liquidity position.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibited a mixed trend. In 2023, the quick ratio stood at 0.94, reflecting a slight improvement from 2022. This ratio indicates that Molina Healthcare may have some difficulty meeting immediate obligations without relying on inventory sales.
The cash ratio, which provides the most conservative measure of liquidity by considering only cash and cash equivalents relative to current liabilities, has shown moderate variability. In 2023, the cash ratio was 0.56, showing a slight increase from the previous year.
Overall, Molina Healthcare Inc's liquidity ratios indicate a generally adequate ability to meet short-term obligations, although there are fluctuations that suggest potential variability in the firm's short-term liquidity position. Investors and stakeholders may want to closely monitor these ratios to assess the company's ongoing liquidity health.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 33.25 | 26.28 | 28.61 | 31.42 | 30.49 |
The cash conversion cycle of Molina Healthcare Inc has been fluctuating over the past five years. In 2023, the company's cash conversion cycle increased to 33.25 days from 26.28 days in 2022. This indicates that it took the company longer to convert its investments in inventory and accounts receivable into cash during this period. However, compared to 2021 and 2020, the cash conversion cycle was shorter in 2023.
It is important to note that a longer cash conversion cycle may suggest inefficiencies in managing inventory, collecting receivables, or paying suppliers. Conversely, a shorter cash conversion cycle indicates that the company is efficiently managing its working capital, which can lead to improved liquidity and cash flow. Overall, Molina Healthcare Inc should continue to monitor and manage its cash conversion cycle to optimize its working capital efficiency.