Privia Health Group Inc (PRVA)

Privia Health Group Inc's liquidity ratios demonstrate a trend of decreasing liquidity over the past three years. The current ratio, which indicates the company's ability to cover its short-term obligations with its current assets, declined from 2.35 in 2021 to 1.81 in 2023. Similarly, the quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, decreased from 2.35 in 2021 to 1.81 in 2023.

The cash ratio, which focuses specifically on the company's ability to cover its short-term liabilities with cash and cash equivalents, also decreased from 1.73 in 2021 to 1.06 in 2023. This downward trend in liquidity ratios suggests that Privia Health Group Inc may be facing challenges in managing its short-term financial obligations effectively.

It is important for the company to closely monitor its liquidity position and take actions to improve its ability to meet short-term obligations promptly. This could include optimizing working capital management, enhancing cash flow generation, and ensuring a healthy balance between current assets and current liabilities.

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Additional liquidity measure

The cash conversion cycle of Privia Health Group Inc has shown variability over the past three years. In 2023, the cash conversion cycle increased to 49.47 days from 36.63 days in 2022, representing a deterioration in the efficiency of the company's cash management. This increase indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during the year.

Comparing 2023 to 2021, where the cash conversion cycle was 38.14 days, there has been a significant increase in the number of days it takes for Privia Health Group Inc to complete its cash conversion cycle. This suggests that the company may have experienced challenges in managing its working capital efficiently in 2023.

Overall, the trend in the cash conversion cycle of Privia Health Group Inc shows a lengthening period over the three years, indicating a potential need for the company to focus on improving its inventory turnover and accounts receivable collection processes to enhance its cash flow and working capital management.