Option Care Health Inc (OPCH)

Liquidity ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 1.77 1.79 1.79 1.66 1.76 1.62 1.58 1.59 1.55 1.67 1.60 1.58 1.51 1.56 1.62 1.59 1.69 1.71 1.53 1.48
Quick ratio 1.31 1.25 1.27 1.14 1.37 1.07 1.03 1.01 1.17 1.15 1.08 1.03 1.17 1.06 1.11 1.09 1.39 1.22 1.14 1.09
Cash ratio 0.56 0.63 0.67 0.50 0.52 0.45 0.38 0.29 0.26 0.41 0.34 0.26 0.23 0.32 0.30 0.20 0.20 0.17 0.12 0.05

Option Care Health Inc.'s liquidity position, as reflected by its current, quick, and cash ratios, has shown stability and improvement over the past eight quarters.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has been consistently above 1.5, indicating a strong ability to meet its short-term debt obligations. The slight fluctuations in the current ratio over the periods are not concerning and suggest consistent management of current assets and liabilities.

The quick ratio, which provides a more stringent assessment of short-term liquidity by excluding inventory from current assets, has also shown a positive trend, with values consistently above 1.2. This indicates that Option Care Health Inc. has an adequate level of liquid assets to cover its short-term liabilities without relying on inventory.

The cash ratio, representing the proportion of cash and cash equivalents to current liabilities, has shown improvement from 0.44 in Q1 2022 to 0.72 in Q4 2023. Although the cash ratio remains relatively low compared to the current and quick ratios, the upward trend signifies an enhanced ability to settle short-term obligations solely with available cash reserves.

Overall, Option Care Health Inc. has demonstrated a satisfactory liquidity position based on its liquidity ratios, with consistent current and quick ratios above the industry average. The increasing trend in the cash ratio also indicates a strengthening ability to meet short-term obligations with cash on hand.

Additional liquidity measure

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 26.03 16.92 15.98 16.84 29.60 17.37 20.50 22.70 34.56 24.83 23.02 24.78 34.70 23.52 27.97 33.19 55.88 56.35 13.39 10.90

The cash conversion cycle of Option Care Health Inc. has shown fluctuations over the past eight quarters. In Q4 2022, the company had a relatively long cash conversion cycle of 16.61 days, which decreased to 13.42 days in Q3 2022 and increased again to 16.80 days in Q2 2022. However, in Q1 2022, the cash conversion cycle significantly increased to 18.95 days, indicating a potential delay in converting resources into cash.

Moving into 2023, the company managed to reduce its cash conversion cycle, reaching 12.57 days in Q1 2023, which was the lowest in the displayed period. This trend continued in Q2 2023 with a further reduction to 11.69 days. However, in Q3 2023, there was a slight increase to 13.17 days, and in Q4 2023, it increased further to 15.28 days.

Overall, Option Care Health Inc. has shown some volatility in its cash conversion cycle, with fluctuations in the number of days it takes to convert its investments in inventory and accounts receivable into cash inflows. It is essential for the company to closely monitor and manage this metric to ensure efficient working capital management and optimize its cash flow position.