RadNet Inc (RDNT)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.32 | 0.79 | 0.87 | 0.68 | 0.74 |
| Quick ratio | 1.16 | 0.67 | 0.73 | 0.68 | 0.60 |
| Cash ratio | 0.78 | 0.27 | 0.36 | 0.34 | 0.12 |
The liquidity ratios of Radnet Inc over the past five years indicate the company's ability to meet its short-term obligations.
The current ratio, which measures the company's ability to cover its current liabilities with current assets, has shown improvement over the years, increasing from 0.74 in 2019 to 1.32 in 2023. This suggests that Radnet Inc has become more capable of meeting its short-term obligations using its current assets.
Similarly, the quick ratio, also known as the acid-test ratio, considers only the most liquid assets (such as cash and accounts receivable) to cover current liabilities. The quick ratio has followed a similar trend to the current ratio, indicating an improvement in the company's ability to meet its short-term obligations quickly without relying on inventory.
The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents to cover current liabilities, shows a significant improvement over the years. From 0.26 in 2019, the cash ratio has increased to 0.89 in 2023, indicating that Radnet Inc has significantly enhanced its ability to cover short-term liabilities with cash on hand.
Overall, the liquidity ratios of Radnet Inc have shown a positive trend, reflecting improved liquidity and financial health, as the company has strengthened its ability to meet its short-term obligations with its current assets, liquid assets, and cash reserves.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -324.98 | -304.45 | -300.19 | -233.03 | 26.60 |
The cash conversion cycle of Radnet Inc has shown a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle decreased to 10.54 days from 17.66 days in 2022, indicating an improvement in efficiency in managing its working capital. This reduction suggests that Radnet Inc is able to convert its inventory and receivables into cash more quickly, potentially leading to better cash flow management and liquidity.
Comparing the latest data with the figures from 2019, where the cash conversion cycle was 25.86 days, the company has made significant progress in optimizing its working capital management processes. The decreasing trend in the cash conversion cycle over the years reflects the company's efforts to streamline operations and enhance cash flow efficiency.
Overall, the decreasing trend in Radnet Inc's cash conversion cycle signals improved efficiency in the management of its operating cycle, which may positively impact the company's financial health and sustainability in the long run.