Perrigo Company PLC (PRGO)

Liquidity ratios

Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 2.56 1.99 1.81 1.79 2.74 2.62 2.52 2.44 2.55 2.61 4.01 2.43 2.11 2.23 3.10 2.27 2.54 2.05 1.86 2.04
Quick ratio 1.55 0.85 0.93 0.94 1.33 1.24 0.51 1.17 0.46 0.48 2.00 1.59 1.04 0.16 0.33 0.46 0.64 0.79 0.31 0.27
Cash ratio 1.01 0.36 0.42 0.47 0.59 0.53 0.51 0.54 0.46 0.48 2.00 1.17 1.04 0.16 0.33 0.46 0.64 0.79 0.31 0.27

Based on the data provided, Perrigo Company PLC's liquidity ratios have shown varying trends over the past few quarters. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been above 2.0, indicating a healthy liquidity position. However, there was a notable increase in the current ratio in the first quarter of 2022, possibly due to higher current assets relative to current liabilities.

The quick ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets, has fluctuated significantly, with values below 1.0 in several quarters. This suggests that Perrigo may have difficulty meeting its short-term obligations without relying on inventory turnover to generate cash.

The cash ratio, representing the most conservative measure of liquidity by considering only cash and cash equivalents, has generally been below 1.0, indicating that Perrigo may have limited cash on hand to cover its current liabilities. Notably, the cash ratio spiked to 2.00 in the first quarter of 2022, possibly due to a significant increase in cash holdings during that period.

Overall, while Perrigo Company PLC has maintained a relatively strong current ratio, its quick ratio and cash ratio highlight potential fluctuations in liquidity and the importance of closely monitoring the company's ability to meet short-term financial obligations.

Additional liquidity measure

Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 153.10 142.78 145.61 139.35 144.50 143.05 81.72 131.83 76.76 73.27 70.32 139.23 89.53 90.44 84.97 68.30 62.99 61.04 42.82 53.26

The cash conversion cycle of Perrigo Company PLC has shown fluctuations over the past few quarters. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory to cash flows from sales.

From December 2019 to March 2020, the cash conversion cycle increased from 42.82 days to 84.97 days, indicating a significant increase in the time taken to convert inventory into cash. This could suggest potential issues with inventory management or delays in collecting receivables.

The cycle then decreased steadily over the subsequent quarters, reaching a low of 61.04 days by March 2021. This improvement may indicate enhanced efficiency in managing inventory and cash flows through the business.

However, the cycle lengthened again in the following quarters, peaking at 153.10 days by September 2024, which suggests difficulties in managing working capital effectively. A prolonged cash conversion cycle can tie up valuable resources and hinder liquidity.

In conclusion, Perrigo Company PLC has experienced fluctuations in its cash conversion cycle, indicating varying levels of efficiency in managing working capital over the analyzed periods. Monitoring and improving this metric are crucial for optimizing cash flows and overall financial performance.