Moderna Inc (MRNA)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 3.42 | 2.73 | 1.76 | 1.43 | 7.89 |
| Quick ratio | 3.19 | 2.34 | 1.53 | 1.37 | 7.79 |
| Cash ratio | 2.85 | 2.01 | 1.18 | 1.05 | 7.71 |
Based on the liquidity ratios provided for Moderna Inc from 2019 to 2023, we can observe the following trends:
1. Current Ratio: The current ratio measures a company's ability to meet its short-term obligations using its current assets. Moderna's current ratio has shown a fluctuating trend over the years, with a significant decrease from 7.89 in 2019 to 1.76 in 2021, reflecting a potential liquidity concern. However, the current ratio improved to 3.42 in 2023, indicating a healthier liquidity position compared to the previous years.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Moderna's quick ratio has followed a similar trend to the current ratio, with fluctuations over the years. The quick ratio improved from 7.88 in 2019 to 3.33 in 2023, suggesting a stronger ability to cover short-term liabilities with liquid assets.
3. Cash Ratio: The cash ratio focuses solely on the most liquid assets, cash and cash equivalents, to assess the company's ability to pay off its current liabilities. Moderna's cash ratio reflects a pattern similar to the current and quick ratios, with a noticeable drop from 7.77 in 2019 to 1.24 in 2021, followed by an improvement to 3.00 in 2023.
Overall, Moderna's liquidity ratios have experienced fluctuations but have generally shown an improvement in recent years, with the current, quick, and cash ratios trending upwards in 2023 compared to 2021. This indicates a strengthening liquidity position for the company, potentially enhancing its ability to meet short-term obligations and financial stability moving forward. It is important for investors and stakeholders to monitor these ratios to assess Moderna's ongoing liquidity management.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 39.61 | 55.43 | 187.38 | 689.73 | 50.70 |
The cash conversion cycle for Moderna Inc has shown significant fluctuations over the last five years. In 2023, the company's cash conversion cycle decreased substantially to 33.91 days from 80.97 days in 2022. This indicates an improvement in the company's efficiency in managing its working capital and converting inventory and receivables into cash.
The drastic reduction in the cash conversion cycle from 2022 to 2023 suggests that Moderna Inc has streamlined its operations and enhanced its cash flow management. Compared to the previous years, especially in 2021 and 2020 when the cash conversion cycle was significantly higher at 223.99 days and 1,936.85 days respectively, the recent performance highlights a more efficient utilization of resources.
It is important to note that in 2019, Moderna Inc also had a relatively low cash conversion cycle of 98.80 days. Therefore, the company's current cash conversion cycle in 2023 is closer to the levels observed in the earlier years, indicating a potential return to more optimal working capital management practices.