Omnicell Inc (OMCL)

Omnicell Inc's liquidity ratios reflect its ability to meet short-term financial obligations and efficiently manage its current assets.

- Current ratio: The current ratio indicates Omnicell's ability to cover its short-term liabilities with its current assets. In 2020, the ratio was high at 3.00, which decreased significantly to 0.89 by 2021, indicating potential liquidity challenges. However, the ratio improved in subsequent years, reaching 2.06 in 2022, 2.52 in 2023, and then dropping slightly to 1.37 in 2024. Overall, the company maintained a current ratio above 1 throughout the years, indicating that it can meet its short-term obligations, with notable fluctuations.

- Quick ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Omnicell's quick ratio followed a similar trend to the current ratio, starting at 1.79 in 2020 and dropping to 0.41 in 2021, which might indicate potential issues in meeting immediate obligations. The ratio improved in subsequent years, reaching 0.80 in 2022, 1.36 in 2023, before declining to 0.64 in 2024. The downward trend in 2024 suggests a potential strain on the company's ability to meet short-term obligations without relying on inventory.

- Cash ratio: The cash ratio evaluates Omnicell's ability to cover its current liabilities with cash and cash equivalents alone. The cash ratio aligns with the quick ratio trends, starting at 1.79 in 2020 and dropping to 0.41 in 2021, implying potential challenges in meeting obligations solely with cash. The ratio improved over the years, reaching 0.80 in 2022, 1.36 in 2023, before declining slightly to 0.64 in 2024. This trend indicates that Omnicell's ability to cover immediate liabilities with cash improved over time but may have declined in 2024.

In summary, Omnicell Inc experienced fluctuations in its liquidity ratios over the years. While maintaining ratios above 1 indicates a general ability to cover short-term obligations, the declining trend observed in some years, especially in 2021 and 2024, may signal potential liquidity challenges that warrant further attention and monitoring.

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Additional liquidity measure

Omnicell Inc's cash conversion cycle has fluctuated over the past five years, starting at 73.39 days as of December 31, 2020, and increasing to 75.81 and 76.18 days in 2021 and 2022, respectively. However, there was a notable improvement in efficiency by the end of 2023, with the cycle decreasing to 61.80 days. This trend continued into 2024, with the cash conversion cycle further reducing to 50.47 days. A decreasing cash conversion cycle indicates that Omnicell Inc is managing its cash flow more effectively and efficiently, which could lead to improved liquidity and profitability in the long run.