Tandem Diabetes Care Inc (TNDM)

Liquidity ratios

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 Jun 30, 2019 Mar 31, 2019
Current ratio 3.83 4.05 4.38 4.43 5.14 4.81 6.00 6.21 6.15 6.31 6.42 6.40 6.14 5.61 4.72 2.82 2.78 2.46 2.53 2.43
Quick ratio 2.94 3.20 3.47 3.57 4.43 4.16 5.31 5.53 5.57 5.70 5.75 5.68 5.46 4.90 4.12 2.15 2.24 2.02 2.14 2.07
Cash ratio 2.40 2.66 2.90 3.04 3.73 3.51 4.56 4.82 4.73 4.97 5.02 4.97 4.67 4.40 3.73 1.61 1.78 1.57 1.56 1.64

The liquidity ratios of Tandem Diabetes Care Inc reflect the company's ability to meet its short-term obligations. The current ratio has decreased from 5.14 in Q4 2022 to 3.83 in Q4 2023, indicating a decline in the company's ability to cover its current liabilities with current assets. However, the current ratio still remains above 1, suggesting that Tandem Diabetes Care Inc has sufficient current assets to meet its short-term liabilities.

The quick ratio, which considers only the most liquid assets, has also decreased from 4.47 in Q4 2022 to 3.02 in Q4 2023. This indicates a reduction in the company's ability to meet its immediate obligations without relying on inventory. Despite the decrease, the quick ratio remains above 1, indicating the company's ability to cover short-term liabilities with its most liquid assets.

The cash ratio, which is the most stringent measure of liquidity, has declined from 3.78 in Q4 2022 to 2.48 in Q4 2023. This suggests that Tandem Diabetes Care Inc may have a lower ability to cover its current liabilities with only cash and cash equivalents. Despite the decline, the cash ratio is above 1, indicating that the company still has sufficient cash to meet its short-term obligations.

Overall, while there has been a downward trend in liquidity ratios from Q4 2022 to Q4 2023, Tandem Diabetes Care Inc still maintains a strong liquidity position with current, quick, and cash ratios above 1 in all periods analyzed. However, the decreasing trend may indicate a need for the company to closely monitor its liquidity position and manage its short-term obligations effectively.

Additional liquidity measure

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 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 105.32 111.86 104.33 93.72 91.21 74.90 70.32 66.89 82.57 73.86 76.47 79.85 98.18 88.70 83.27 88.20 80.62 78.65 88.04 74.66

The cash conversion cycle of Tandem Diabetes Care Inc has been progressively increasing over the past eight quarters, indicating a lengthening period for the company to convert its investments in inventory back into cash. The trend suggests potential challenges in efficiently managing its working capital, particularly in terms of inventory turnover, accounts receivable collection, and accounts payable management.

The company's cash conversion cycle increased from 83.38 days in Q1 2022 to 155.59 days in Q4 2023, reflecting a significant deterioration in the efficiency of its cash conversion process. This trend may necessitate a closer review of Tandem Diabetes Care Inc's operational and financial strategies to identify the underlying reasons for the prolonged cash conversion cycle and to implement measures to improve working capital management.

Overall, the increasing cash conversion cycle of Tandem Diabetes Care Inc indicates the need for proactive management of its operating cycle to enhance liquidity, optimize inventory levels, expedite accounts receivable collections, and negotiate favorable payment terms with suppliers to shorten the cash conversion cycle and improve the company's overall financial performance.