NeoGenomics Inc (NEO)

NeoGenomics Inc has shown strong liquidity ratios over the past few years. The current ratio has consistently remained above 1, reflecting the company's ability to cover its short-term obligations with its current assets. The current ratio increased from 6.13 in 2020 to 7.81 in 2021 and then decreased slightly to 6.73 in 2022, indicating a temporary fluctuation but still remaining at a healthy level above 1.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also exhibited a positive trend. NeoGenomics Inc's quick ratio has consistently been well above 1, indicating the company's ability to meet its short-term obligations even if inventory cannot be quickly converted to cash. The quick ratio increased from 4.05 in 2020 to 5.91 in 2021 and then decreased to 4.87 in 2022, remaining strong throughout the period.

Furthermore, the cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has also shown a solid performance. The cash ratio has been comfortably above 1, suggesting that NeoGenomics Inc holds sufficient cash to meet its short-term obligations without relying on other current assets. The cash ratio remained stable from 2020 to 2021 and then exhibited a slight decrease in 2022, but it remained at a healthy level.

Overall, NeoGenomics Inc's liquidity ratios indicate that the company has maintained a strong financial position with ample liquidity to support its operations and meet its short-term obligations.

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Additional liquidity measure

NeoGenomics Inc's cash conversion cycle has shown a positive trend over the past five years, decreasing from 41.68 days as of December 31, 2020, to 26.35 days as of December 31, 2024. This indicates an improvement in the company's efficiency in managing its working capital.

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash receipts from sales. A shorter cash conversion cycle generally indicates that the company is better able to efficiently manage its working capital and turn its inventory and receivables into cash quickly.

NeoGenomics Inc's decreasing cash conversion cycle over the five-year period suggests that the company has been able to streamline its operational processes, manage its inventory levels effectively, and collect receivables efficiently. This improvement in the cash conversion cycle may be attributed to better inventory management, effective accounts receivable collection processes, or optimized payables management.

Overall, the decreasing trend in NeoGenomics Inc's cash conversion cycle reflects positively on the company's operational efficiency and working capital management, which can potentially lead to improved liquidity and financial performance in the future.