Pacira Pharmaceuticals Inc (PCRX)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 5.24 | 3.37 | 1.66 | 2.57 | 3.79 |
| Quick ratio | 3.94 | 2.62 | 1.44 | 2.27 | 3.15 |
| Cash ratio | 2.86 | 1.95 | 1.26 | 2.06 | 2.71 |
Pacira BioSciences Inc's liquidity ratios show a positive trend over the past five years. The current ratio, which measures short-term liquidity by comparing current assets to current liabilities, has improved significantly from 1.66 in 2021 to 5.24 in 2023. This indicates that the company has more than enough current assets to cover its short-term obligations.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also shows a positive trend, increasing from 1.47 in 2021 to 4.17 in 2023. This suggests that the company has a strong ability to meet its short-term liabilities without relying on selling inventory.
The cash ratio, which is the most conservative measure of liquidity as it only includes cash and cash equivalents in the numerator, has also shown improvement over the years, rising from 1.29 in 2021 to 3.08 in 2023. This indicates that Pacira BioSciences Inc has a solid cash position relative to its current liabilities, providing a cushion in case of any unexpected financial challenges.
Overall, the increasing trend in these liquidity ratios reflects positively on Pacira BioSciences Inc's liquidity position and suggests that the company has a strong ability to meet its short-term obligations with its available liquid assets.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 235.78 | 205.35 | 293.95 | 213.74 | 196.82 |
The cash conversion cycle of Pacira BioSciences Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle increased to 232.31 days from 201.92 days in 2022, indicating that the company took longer to convert its investments in inventory and receivables back into cash. This increase may raise concerns about the efficiency of Pacira BioSciences' working capital management.
Comparing 2023 to 2021 and 2020, where the cash conversion cycles were 293.95 days and 213.74 days respectively, the company has shown improvement in converting its resources into cash. However, it is worth noting that there was a notable increase from 2020 to 2021. The fluctuation in the cash conversion cycle could be impacted by changes in the company's operating efficiency, inventory management, and accounts receivable collection.
Overall, Pacira BioSciences Inc should aim to optimize its cash conversion cycle by streamlining its operations, improving inventory turnover, and enhancing its receivables collection process to ensure a more efficient use of its working capital.