Penumbra Inc (PEN)

Penumbra Inc's liquidity ratios indicate a healthy ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its current liabilities with its current assets, remained consistently strong over the years, ranging from 5.21 to 6.06. This suggests that Penumbra has more than enough current assets to cover its short-term liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, ranged from 1.30 to 2.15. Although there was some fluctuation in this ratio, it generally remained above 1, indicating that Penumbra can meet its short-term obligations without relying on the sale of inventory.

The cash ratio, which specifically looks at the company's ability to cover current liabilities with its cash and cash equivalents, mirrored the quick ratio results, ranging from 1.30 to 2.15. This implies that Penumbra has a sufficient amount of cash on hand to cover its immediate short-term liabilities.

Overall, Penumbra Inc's liquidity ratios demonstrate a strong financial position and ability to manage its short-term obligations effectively.

---

Additional liquidity measure

Penumbra Inc's cash conversion cycle, a metric that reflects the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has shown some fluctuations over the past five years.

Starting at 360.55 days on December 31, 2020, the cycle decreased slightly to 353.33 days on December 31, 2021. However, during the next year, it increased significantly to 390.84 days on December 31, 2022, indicating a slower conversion of resources into cash flows.

By December 31, 2023, the cash conversion cycle improved to 376.79 days, suggesting a more efficient conversion process compared to the previous year. The cycle further decreased to 337.70 days by December 31, 2024, indicating a more streamlined process of converting resources into cash.

Overall, while there have been fluctuations in Penumbra Inc's cash conversion cycle over the years, the company seems to have made progress in managing its resources more efficiently and improving the speed at which it converts investments into cash flows.