Neurocrine Biosciences Inc (NBIX)

Neurocrine Biosciences, Inc.'s liquidity ratios have shown some fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has decreased from 5.45 in 2020 to 2.45 in 2023. Despite the decline, the current ratio remains at a healthy level above 1, indicating that the company has sufficient current assets to cover its current liabilities.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, follows a similar trend, decreasing from 5.30 in 2020 to 2.40 in 2023. The quick ratio is also above 1 in all years, suggesting that Neurocrine Biosciences, Inc. can meet its short-term obligations even when excluding inventory.

The cash ratio, which provides the most conservative measure of liquidity by only considering cash and cash equivalents, has also decreased over the years from 4.46 in 2020 to 1.72 in 2023. While the decreasing trend indicates a reduction in the company's ability to pay off its short-term liabilities solely with cash, the cash ratio is still above 1, indicating that Neurocrine Biosciences, Inc. maintains a healthy level of cash on hand.

Overall, Neurocrine Biosciences, Inc. demonstrates sound liquidity levels based on its current, quick, and cash ratios over the years, although there has been a slight decline in liquidity over the most recent years. Further analysis and consideration of the company's cash management practices and working capital efficiency would provide a more comprehensive understanding of its liquidity position.

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Additional liquidity measure

Neurocrine Biosciences, Inc. has shown fluctuations in its cash conversion cycle over the past five years. The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

The trend for the cash conversion cycle for Neurocrine Biosciences, Inc. shows an improvement from 908.13 days in 2019 to 437.10 days in 2023. This significant decrease indicates that the company has been able to manage its working capital more efficiently over the years.

A lower cash conversion cycle implies that Neurocrine Biosciences, Inc. has been able to collect cash from its customers more quickly, manage its inventory effectively, and negotiate better payment terms with suppliers. This efficiency can lead to improved liquidity and cash flow for the company.

It is essential for Neurocrine Biosciences, Inc. to continue monitoring and managing its cash conversion cycle to ensure that it remains at an optimal level. By doing so, the company can enhance its overall financial performance and strengthen its position in the industry.