Myriad Genetics Inc (MYGN)

The liquidity ratios of Myriad Genetics, Inc. demonstrate the company's ability to meet its short-term obligations efficiently.

The current ratio, which measures the firm's ability to cover its short-term liabilities with its short-term assets, has remained relatively stable over the years, ranging from 2.00 to 2.37. A current ratio above 1 indicates that the company has more current assets than current liabilities, with a higher ratio indicating a stronger liquidity position. Myriad Genetics' current ratio hovering around 2 suggests that the company has a comfortable margin of safety in meeting its short-term obligations.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. Myriad Genetics' quick ratio has also shown consistent stability, ranging from 1.85 to 2.30. A quick ratio above 1 indicates that the company can meet its short-term liabilities without relying on selling inventory, which is a positive sign for creditors and investors.

The cash ratio, the most conservative liquidity metric, considers only the most liquid assets, namely cash and cash equivalents, in relation to current liabilities. Myriad Genetics' cash ratio has displayed a similar trend of stability, ranging from 1.11 to 1.85. A cash ratio above 1 signifies that the company can cover its short-term liabilities with its cash holdings alone, which highlights a strong liquidity position.

Overall, the consistent values of the liquidity ratios of Myriad Genetics, Inc. indicate that the company has maintained a healthy liquidity position over the years, with ample resources to meet its short-term obligations without significant financial strain.

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Additional liquidity measure

The cash conversion cycle for Myriad Genetics, Inc. has exhibited varying trends over the past five years. In 2023, the company's cash conversion cycle increased to 49.52 days from 38.94 days in 2022, indicating a deterioration in the efficiency of converting its investments in inventory into cash receipts from sales. This increase suggests that Myriad Genetics took longer to sell its inventory and collect cash from customers in 2023 compared to the previous year.

Looking back at 2021, the company had a relatively shorter cash conversion cycle of 21.84 days, reflecting a more efficient performance in managing its working capital. However, this efficiency deteriorated in the subsequent years, evidenced by the longer cycles in 2022 and 2023.

Comparing the latest figures to those from the midpoint of 2020 and 2019, the cash conversion cycle has remained at elevated levels, indicating persistent challenges in optimizing the company's inventory management, accounts receivable collection, and accounts payable payment processes. The trend suggests room for improvement in streamlining operations to accelerate cash inflows and enhance liquidity management at Myriad Genetics, Inc.