Neurocrine Biosciences Inc (NBIX)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 3.40 | 2.45 | 2.70 | 3.96 | 5.45 |
| Quick ratio | 3.09 | 2.25 | 2.49 | 3.66 | 5.16 |
| Cash ratio | 2.12 | 1.58 | 1.84 | 2.89 | 4.29 |
Neurocrine Biosciences Inc's liquidity ratios indicate the company's ability to meet its short-term obligations.
- The current ratio has been declining over the years, from 5.45 in 2020 to 3.40 in 2024. While the current ratio remains above 1, indicating that the company can cover its current liabilities with current assets, the decreasing trend may suggest a tightening liquidity position.
- The quick ratio follows a similar trend, decreasing from 5.16 in 2020 to 3.09 in 2024. This ratio excludes inventory from current assets, providing a more conservative measure of liquidity. Despite the decline, the quick ratio still indicates the company's ability to meet short-term obligations without relying on the sale of inventory.
- The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, also shows a decreasing trend over the years, from 4.29 in 2020 to 2.12 in 2024. This implies that Neurocrine Biosciences Inc's ability to cover its short-term liabilities with cash on hand has decreased.
Overall, the declining trend in all three liquidity ratios suggests that Neurocrine Biosciences Inc's liquidity position has weakened over the years. The company may want to closely monitor its liquidity and working capital management to ensure it can meet its short-term obligations efficiently.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 96.54 | 100.16 | 107.00 | 80.93 | 82.59 |
The cash conversion cycle of Neurocrine Biosciences Inc has experienced fluctuations over the years. As of December 31, 2020, the company's cash conversion cycle was 82.59 days. This figure improved slightly to 80.93 days by December 31, 2021. However, there was a significant increase in the cash conversion cycle to 107.00 days by December 31, 2022, indicating a potential delay in converting inventory and receivables into cash.
The situation improved slightly by December 31, 2023, with a cash conversion cycle of 100.16 days, but it remained elevated compared to previous years. By December 31, 2024, there was a further decrease in the cash conversion cycle to 96.54 days, suggesting some improvement in the efficiency of the company's cash management.
Overall, Neurocrine Biosciences Inc should continue to monitor and potentially streamline its cash conversion cycle to ensure a more efficient use of its working capital and enhance its overall financial performance.