Myriad Genetics Inc (MYGN)

Myriad Genetics Inc has demonstrated a fluctuating trend in its liquidity ratios over the past few years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally remained above 2, indicating a healthy liquidity position. However, there was a noticeable decline in the current ratio from June 2023 to December 2024, possibly signaling a slight decrease in short-term financial health during that period.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also showed variability over the years. It dropped significantly from September 2021 to December 2022 but recovered somewhat in the following periods. The declining trend in the quick ratio during certain quarters may suggest potential issues with the company's ability to quickly meet its immediate financial obligations without relying on inventory.

The cash ratio, which is the most stringent liquidity measure as it only considers cash and cash equivalents to cover short-term liabilities, exhibited a similar pattern to the quick ratio. The cash ratio decreased notably during the period from March 2023 to December 2023 but then improved gradually in subsequent quarters. This indicates that Myriad Genetics may have faced challenges in maintaining a strong cash position during the specified timeframe.

Overall, while Myriad Genetics Inc has generally maintained satisfactory liquidity levels, there have been fluctuations in its liquidity ratios, particularly in the quick and cash ratios, which may warrant further monitoring and analysis to ensure the company's ability to meet its short-term obligations efficiently.

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Additional liquidity measure

Myriad Genetics Inc's cash conversion cycle, a metric that measures how long it takes for a company to convert its investments in inventory and other resources into cash flow from sales, has shown fluctuations over the past few years.

From March 2020 to December 2020, the cash conversion cycle was around 55 to 57 days, indicating that the company took on average about 55 to 57 days to convert its investments into cash flow. There was a slight decrease in the cash conversion cycle in the first half of 2021, where it dropped to around 33 to 34 days, suggesting that the company was able to manage its working capital more efficiently during that period.

However, in the second half of 2021 and throughout 2022, the cash conversion cycle increased again, reaching around 36 to 40 days, indicating a potential slowdown in the company's ability to convert investments into cash. This trend continued into early 2024, with the cash conversion cycle remaining in the range of 37 to 40 days.

Overall, the cash conversion cycle of Myriad Genetics Inc has shown fluctuations, highlighting the importance of efficient working capital management to ensure a steady flow of cash in the business operations. The company may need to examine its inventory management, accounts receivable, and accounts payable processes to optimize its cash conversion cycle and improve cash flow efficiency.