ResMed Inc (RMD)

Liquidity ratios

	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	Sep 30, 2019
Current ratio	2.59	3.04	3.11	2.99	3.12	3.07	3.17	2.94	2.80	2.55	2.49	2.54	1.73	1.67	2.51	2.61	2.53	2.66	2.60	2.11
Quick ratio	1.19	1.34	1.24	1.18	1.25	1.22	1.27	1.19	1.25	1.09	1.19	1.42	1.00	0.89	1.33	1.50	1.56	1.65	1.46	1.21
Cash ratio	0.27	0.34	0.29	0.29	0.32	0.32	0.35	0.30	0.41	0.33	0.34	0.50	0.32	0.29	0.44	0.72	0.77	0.64	0.41	0.31

Based on the liquidity ratios provided for ResMed Inc over the past few quarters, the company generally exhibits strong liquidity positions.

1. Current Ratio: The current ratio has been consistently above 2 in recent quarters, indicating that ResMed has more than enough current assets to cover its current liabilities. The ratio has stayed relatively stable, ranging between 2.49 and 3.17, showing that the company has a good ability to meet its short-term obligations.

2. Quick Ratio: The quick ratio, which excludes inventory from current assets, also reflects a healthy liquidity position for ResMed. The ratio has generally been above 1, signaling that the company has an adequate level of liquid assets to cover its short-term liabilities without relying on inventory. The ratio has ranged between 1.09 and 1.50, which suggests a consistent ability to meet immediate obligations.

3. Cash Ratio: The cash ratio, which is a stricter measure of liquidity as it only considers cash and cash equivalents, also shows a positive trend for ResMed. The company has maintained a cash ratio above 0.2, indicating a strong ability to cover short-term liabilities with cash on hand. The ratio has fluctuated between 0.27 and 0.77, with some variability, but generally reflecting a solid liquidity position.

Overall, based on the current, quick, and cash ratios, ResMed Inc appears to have a robust liquidity position, with ample assets to cover its short-term liabilities. Maintaining these strong liquidity ratios is essential for the company to weather any unforeseen financial challenges and meet its obligations efficiently.

Additional liquidity measure

		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	Sep 30, 2019
Cash conversion cycle	days	135.25	141.40	148.22	157.14	173.38	179.93	182.31	167.21	149.14	132.71	124.49	117.17	124.59	134.19	137.21	147.27	141.39	142.58	150.55	145.27

The cash conversion cycle is a measure of the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It is calculated by adding the days of inventory outstanding (DIO) to the days sales outstanding (DSO) and then subtracting the days payables outstanding (DPO).

Based on the provided data for ResMed Inc, the cash conversion cycle has exhibited fluctuations over the past few quarters. Initially, the company's cash conversion cycle was at a relatively high point, exceeding 170 days in the middle of 2021. However, it improved gradually during subsequent quarters before peaking again. The cycle reached its lowest point around March 2022, indicating efficient management of working capital.

Subsequently, the cycle increased, indicating potential challenges in managing inventory, accounts receivable, and payables. By March 2024, the cash conversion cycle stood at 141.40 days, which was relatively higher compared to the lower levels observed in the previous year.

Overall, the trend in ResMed Inc's cash conversion cycle suggests fluctuations in the efficiency of its working capital management. A decreasing trend indicates improved efficiency, while an increasing trend may signal inefficiencies in managing cash flows. It is essential for the company to monitor and optimize its inventory, accounts receivable, and accounts payable processes to enhance its cash conversion cycle and overall financial performance.