RadNet Inc (RDNT)

RadNet Inc's liquidity ratios show varying trends over the years.

- The current ratio, which measures the ability to cover short-term obligations with current assets, has improved from 0.68 in 2020 to 2.12 in 2024. This indicates that the company's liquidity position has strengthened significantly.

- The quick ratio, a more stringent measure of liquidity excluding inventory, also demonstrates improvement over the years, increasing from 0.68 in 2020 to 1.93 in 2024. This suggests that the company has a better ability to meet its short-term obligations with its most liquid assets.

- The cash ratio, which focuses solely on cash and cash equivalents to cover current liabilities, has seen a steady increase from 0.34 in 2020 to 1.54 in 2024. This implies a growing ability to settle immediate obligations with cash on hand.

Overall, RadNet Inc's liquidity ratios indicate a positive liquidity trend, with the company becoming increasingly better positioned to meet its short-term financial obligations as reflected in the improving current ratio, quick ratio, and cash ratio over the years.

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Additional liquidity measure

The cash conversion cycle of RadNet Inc has shown consistent improvement over the years, reflecting the company's efficiency in managing its working capital. As of December 31, 2020, the cash conversion cycle was -233.03 days, indicating that the company was able to convert its inventory, accounts receivable, and accounts payable into cash in negative 233.03 days. This trend continued to improve, with the cycle decreasing to -300.19 days by December 31, 2021, -304.45 days by December 31, 2022, and -324.98 days by December 31, 2023. However, there was a slight increase to -236.66 days by December 31, 2024.

A negative cash conversion cycle signifies that RadNet Inc is receiving cash from its operating cycle before paying its suppliers, which is a favorable position indicating strong liquidity and operational efficiency. The company's ability to shorten its cash conversion cycle indicates effective management of inventory, accounts receivable, and accounts payable, ultimately leading to quicker cash flows. Despite the slight increase in the cash conversion cycle in 2024, RadNet Inc's overall performance in this area remains robust and reflective of a well-managed working capital cycle.