Inari Medical Inc (NARI)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Current ratio | 3.09 | 7.53 | 5.77 | 14.86 |
| Quick ratio | 2.43 | 6.85 | 5.14 | 13.89 |
| Cash ratio | 1.51 | 5.81 | 4.14 | 11.87 |
Inari Medical Inc's liquidity ratios indicate the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has decreased over the years from 14.86 in 2020 to 3.09 in 2023. Despite the decline, the current ratio remains above 1, suggesting that the company has sufficient current assets to cover its current liabilities.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also seen a decline from 14.09 in 2020 to 2.52 in 2023. This indicates that the company might have a lower ability to cover its short-term obligations without relying on inventory.
The cash ratio, which is the most conservative measure of liquidity and only includes cash and cash equivalents, has also decreased over the years from 12.07 in 2020 to 1.60 in 2023. This suggests that the company's cash position relative to its current liabilities has decreased, highlighting a potential need to manage cash flow more efficiently.
Overall, while Inari Medical Inc's liquidity ratios have declined over the years, the company still demonstrates a reasonable liquidity position. However, management should continue to monitor and improve its liquidity position to ensure the ability to meet short-term obligations effectively.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Cash conversion cycle | days | 79.87 | 260.18 | 269.76 | 283.46 |
The cash conversion cycle for Inari Medical Inc has shown a decreasing trend over the past four years, demonstrating the company's improving efficiency in managing its cash flow from operations. In 2020, the cash conversion cycle was 283.46 days, decreasing to 269.76 days in 2021, further decreasing to 260.18 days in 2022, and finally reaching 251.58 days in 2023.
A shorter cash conversion cycle indicates that the company is able to convert its investments in inventory and accounts receivable into cash more quickly, which is generally seen as a positive trend. This improvement suggests that Inari Medical Inc has been managing its working capital more effectively, potentially leading to better financial health and operational performance.