Penumbra Inc (PEN)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 6.06 | 5.21 | 5.53 | 5.83 | 5.09 |
| Quick ratio | 3.25 | 2.70 | 3.16 | 3.58 | 3.24 |
| Cash ratio | 1.91 | 1.30 | 2.07 | 2.50 | 2.08 |
Penumbra Inc's liquidity ratios have shown a generally positive trend over the past five years, indicating a strong ability to meet its short-term obligations. The current ratio has been consistently above 5, which indicates that the company has more than enough current assets to cover its current liabilities. This suggests a healthy level of liquidity and financial stability.
The quick ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets, has also shown an upward trend, with values ranging from 2.91 to 3.49. This demonstrates that Penumbra Inc has sufficient liquid assets to cover its short-term liabilities even if inventory cannot be quickly converted into cash.
The cash ratio, which is the most conservative liquidity measure as it only includes cash and cash equivalents, has also been increasing over the years, reaching a value of 2.15 in 2023. This indicates that Penumbra Inc has a solid cash position relative to its current liabilities, which is important for meeting immediate financial obligations.
Overall, based on these liquidity ratios, Penumbra Inc appears to have a robust liquidity position, with ample resources to cover its short-term financial commitments and operate effectively in the current business environment.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 420.00 | 447.25 | 400.73 | 412.02 | 357.47 |
The cash conversion cycle of Penumbra Inc has shown some fluctuations over the past five years. In 2023, the company's cash conversion cycle stood at 420.00 days, indicating that on average, it takes Penumbra Inc 420.00 days to convert its investments in inventory and other resources into cash receipts from customers. This was an improvement from the previous year, where the cycle was 447.25 days.
Comparing 2023 to earlier years, the cash conversion cycle in 2023 was higher than in 2021 when it was 400.73 days, and in 2020 when it was 412.02 days. However, it was lower than in 2019 when it was 357.47 days.
The cash conversion cycle is a key indicator of a company's operational efficiency and liquidity management. A shorter cycle indicates that a company is able to quickly convert its investments into cash, which is generally favorable. Penumbra Inc's management may need to monitor and analyze factors contributing to the fluctuations in the cash conversion cycle to ensure optimal operational efficiency and cash flow management in the future.