Quidel Corporation (QDEL)

Quidel Corporation's liquidity ratios show fluctuations over the years. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, improved from 3.39 in 2020 to 4.45 in 2021 but then declined to 1.56 in 2022 and 1.57 in 2023 before dropping further to 1.22 in 2024. This downward trend indicates a potential decrease in the company's ability to meet its short-term obligations.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, followed a similar pattern. It increased from 1.45 in 2020 to 2.56 in 2021 but then experienced a sharp decline to 0.34 in 2022, further dropping to 0.20 in 2023, and 0.15 in 2024. This downward trend suggests a potential strain on the company's ability to meet its immediate obligations without relying on selling inventory.

The cash ratio, which specifically examines the company's ability to cover its current liabilities with cash and cash equivalents, mirrors the pattern seen in the quick ratio. It increased from 1.45 in 2020 to 2.56 in 2021 but then declined steeply to 0.34 in 2022, further decreasing to 0.20 in 2023, and 0.15 in 2024. This decrease indicates a potential reduction in the company's ability to use cash on hand to settle its short-term debts.

Overall, Quidel Corporation's liquidity ratios show a fluctuating trend, with a significant decline in recent years. This may raise concerns about the company's liquidity position and its ability to efficiently manage short-term financial obligations. Further analysis and monitoring of the company's liquidity management strategies may be necessary to address these challenges.

---

Additional liquidity measure

The cash conversion cycle of Quidel Corporation has fluctuated over the past five years. It stood at 132.78 days on December 31, 2020, increased to 169.64 days by December 31, 2021, then decreased to 143.83 days by December 31, 2022. Subsequently, it further decreased to 123.32 days by December 31, 2023, and slightly increased to 130.18 days by December 31, 2024.

The cash conversion cycle measures the time it takes for a company to convert its inputs (such as raw materials) into cash flows from sales. A longer cash conversion cycle may indicate inefficiencies in working capital management, production delays, or issues with collecting receivables.

Quidel Corporation's fluctuating cash conversion cycle suggests varying efficiencies in managing its working capital and cash flow over the years. It is essential for the company to closely monitor and optimize its cash conversion cycle to improve operational effectiveness and financial performance.