TransMedics Group Inc (TMDX)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 8.30 | 9.30 | 10.66 | 5.11 | 12.36 |
| Quick ratio | 5.62 | 7.19 | 8.50 | 3.98 | 10.58 |
| Cash ratio | 5.62 | 7.19 | 8.50 | 3.98 | 10.58 |
TransMedics Group Inc's current ratio decreased from 12.36 in December 31, 2020 to 5.11 in December 31, 2021 before gradually increasing to 10.66 in December 31, 2022 and then slightly declining to 9.30 in December 31, 2023 and further to 8.30 in December 31, 2024. The current ratio measures the company's ability to cover its short-term obligations with its current assets.
The quick ratio follows a similar trend, declining from 10.58 in December 31, 2020 to 3.98 in December 31, 2021 before showing an increase to 8.50 in December 31, 2022. It then decreased to 7.19 in December 31, 2023 and further to 5.62 in December 31, 2024. The quick ratio provides a more stringent assessment of liquidity as it excludes inventory from current assets.
The cash ratio, which specifically assesses a company's ability to cover its short-term liabilities with its cash and cash equivalents, mirrors the trend of the quick ratio, moving from 10.58 in December 31, 2020 to 3.98 in December 31, 2021, rising to 8.50 in December 31, 2022, and then declining to 7.19 in December 31, 2023 and 5.62 in December 31, 2024.
Overall, the liquidity ratios of TransMedics Group Inc show fluctuations over the years, with some improvements in the ability to meet short-term obligations but also some decreases in liquidity. It is essential for the company to monitor these ratios closely to ensure its ability to cover its short-term liabilities efficiently.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 94.69 | 184.46 | 266.82 | 595.80 | 483.77 |
The cash conversion cycle of TransMedics Group Inc has shown a fluctuating trend over the years. In 2020, the company's cash conversion cycle stood at approximately 483.77 days, indicating a period of time required to convert its investments in inventory and other resources into cash flows from sales.
However, by the end of 2021, the cash conversion cycle had extended to 595.80 days, suggesting a lengthened time for the company to convert its investments into cash. This increase may raise concerns about the company's liquidity and efficiency in managing its working capital.
In a positive turn, the cash conversion cycle significantly improved in 2022, decreasing to 266.82 days, demonstrating a more efficient conversion of assets into cash. This improvement may signal better management of inventory, accounts receivable, and accounts payable, resulting in a healthier cash position for the company.
Furthermore, in 2023, the cash conversion cycle declined even further to 184.46 days, indicating a continued enhancement in TransMedics Group Inc's ability to convert its resources into cash more swiftly. This trend suggests improved efficiency in the company's operations and financial management.
By the end of 2024, the cash conversion cycle of TransMedics Group Inc had decreased notably to 94.69 days, reflecting a considerable optimization in the company's working capital management and cash flow conversion processes. This reduction may positively impact the company's liquidity and overall financial health.
In conclusion, the analysis of TransMedics Group Inc's cash conversion cycle reveals fluctuations over the years, with improvements seen in recent periods. Monitoring the trend of the cash conversion cycle is crucial for assessing the company's operational efficiency, liquidity, and financial performance.