TransMedics Group Inc (TMDX)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 9.30 | 10.66 | 5.11 | 12.36 | 6.21 |
| Quick ratio | 8.34 | 9.67 | 4.24 | 11.15 | 5.41 |
| Cash ratio | 7.19 | 8.50 | 3.98 | 10.57 | 5.01 |
By analyzing the liquidity ratios of TransMedics Group Inc over the past five years, we can observe the following trends:
1. Current Ratio:
- The current ratio measures the company's ability to meet its short-term obligations with its current assets. A higher current ratio indicates better liquidity.
- TransMedics Group Inc's current ratio has fluctuated over the years, ranging from 5.11 in 2021 to 12.36 in 2020. It decreased to 9.30 in 2023, which is still considered a strong liquidity position.
2. Quick Ratio:
- The quick ratio is a more stringent measure of liquidity as it excludes inventories from current assets. A higher quick ratio suggests greater ability to meet short-term obligations.
- TransMedics Group Inc's quick ratio has shown similar trends to the current ratio, ranging from 4.24 in 2021 to 11.15 in 2020. It decreased to 8.34 in 2023, indicating slightly lower liquidity than the current ratio.
3. Cash Ratio:
- The cash ratio is the most conservative liquidity measure, focusing solely on the company's ability to cover its short-term liabilities with cash and cash equivalents.
- TransMedics Group Inc's cash ratio has also followed a similar pattern, with values ranging from 3.98 in 2021 to 10.57 in 2020. The cash ratio decreased to 7.19 in 2023, indicating a slight decrease in the company's ability to cover short-term obligations with cash alone.
In conclusion, TransMedics Group Inc has maintained strong liquidity ratios over the years, with all three ratios consistently above 7. This suggests that the company has a healthy level of liquidity to meet its short-term obligations, although there has been a slight decrease in liquidity ratios in 2023 compared to the previous years. Overall, the company appears to have a solid financial position in terms of liquidity.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 227.47 | 331.39 | 400.69 | 532.60 | 250.15 |
The cash conversion cycle of TransMedics Group Inc has shown fluctuations over the past five years.
In 2023, the company's cash conversion cycle decreased significantly to 227.47 days from the previous year's level of 331.39 days in 2022. This indicates that TransMedics has improved its efficiency in managing its working capital and converting its investments in inventory and receivables into cash more quickly.
Looking back, in 2021, the cash conversion cycle was 400.69 days, showing a notable improvement from the significantly higher level of 532.60 days in 2020. This improvement suggests that the company may have implemented more effective strategies in managing its inventory, accounts receivable, and accounts payable.
The cash conversion cycle in 2019 was 250.15 days, which was lower than the levels seen in 2020 and 2021 but higher than that of 2023. The fluctuation in the cash conversion cycle over the years might indicate varying operating efficiency and effectiveness in managing the company's cash flows and working capital.
Overall, the downward trend in the cash conversion cycle from 2022 to 2023 is a positive sign for TransMedics Group Inc, reflecting potential improvements in its inventory management, accounts receivable collection, and payment to suppliers. It suggests that the company is becoming more efficient in converting its resources into cash, which can have a positive impact on its liquidity and overall financial health.