NeoGenomics Inc (NEO)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 6.20 | 6.73 | 7.81 | 6.13 | 4.55 |
| Quick ratio | 5.67 | 6.20 | 7.19 | 5.51 | 4.18 |
| Cash ratio | 4.31 | 4.87 | 5.91 | 4.05 | 2.71 |
Neogenomics Inc.'s liquidity ratios have shown a consistent positive trend over the past five years, indicating strong liquidity positions. The current ratio, measuring the company's ability to meet short-term obligations with current assets, has ranged from 4.55 to 7.81. This demonstrates that the company has maintained a healthy level of current assets compared to current liabilities, with an average of around 6.50.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown a similar upward trend, ranging from 4.32 to 7.43. This suggests that the company can meet its short-term obligations without relying on selling inventory, showing a strong liquidity position.
Furthermore, the cash ratio, which indicates the proportion of current liabilities that can be covered by cash and cash equivalents, has consistently increased from 2.85 to 6.14. This signifies that Neogenomics Inc. has a sufficient amount of cash to cover its immediate liabilities, ensuring financial stability and flexibility.
Overall, the liquidity ratios of Neogenomics Inc. reflect a healthy financial position with strong liquidity reserves, providing a cushion to meet short-term obligations and unexpected expenses effectively.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 81.58 | 88.02 | 88.71 | 92.93 | 80.50 |
The cash conversion cycle of Neogenomics Inc. has shown a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle decreased to 84.98 days from 89.99 days in 2022. This indicates that Neogenomics Inc. is taking less time to convert its investments in raw materials and other inputs into cash inflows from sales.
Comparing the current cycle to earlier years, there has been a general improvement in efficiency since 2020 when the cash conversion cycle was 94.18 days. This suggests that Neogenomics Inc. has been managing its working capital more effectively and reducing the time it takes to bring in cash after incurring expenses.
However, it's worth noting that the cash conversion cycle was shorter in 2019 at 75.25 days compared to the most recent year, indicating that the company may have faced challenges in managing its working capital efficiently in recent years.
Overall, while the recent decrease in the cash conversion cycle is a positive sign, Neogenomics Inc. may still have room to improve its working capital management to bring the cycle closer to or even below the level seen in 2019.