Tandem Diabetes Care Inc (TNDM)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.93 | 2.90 | 3.05 | 3.81 | 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 |
| Quick ratio | 1.77 | 1.83 | 1.88 | 2.42 | 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 |
| Cash ratio | 1.77 | 1.83 | 1.88 | 2.42 | 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 |
The Current Ratio of Tandem Diabetes Care Inc has shown a generally increasing trend from 2.82 as of March 31, 2020, to 6.00 as of June 30, 2022. However, after June 30, 2022, there was a decline in the current ratio to 2.93 by December 31, 2024. This indicates that the company's ability to cover its short-term obligations with its current assets improved over the period but started to weaken towards the end of the analysis period.
The Quick Ratio, which excludes inventory from current assets, also exhibited an upward trend initially, reaching a peak of 5.02 on June 30, 2021. However, similar to the Current Ratio, it started to decline post that date, reaching 1.77 by December 31, 2024. This suggests a significant decrease in the company's ability to meet its short-term liabilities with more liquid assets as the ratio fell below 1, indicating potential liquidity issues.
The Cash Ratio, which specifically measures the firm's ability to cover its current liabilities with cash and cash equivalents, followed a similar trajectory to the Quick Ratio. It improved over the initial period but then declined consistently, ending at 1.77 by December 31, 2024. This indicates a potential decrease in the company's ability to settle its short-term obligations with its most liquid assets.
In summary, Tandem Diabetes Care Inc experienced a positive liquidity position with increasing current, quick, and cash ratios until mid-2022, which then started to decline. The declining trend towards the end of the analysis period implies that the company may face challenges in meeting its short-term financial obligations with its current liquid assets.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 95.81 | 101.49 | 145.52 | 143.82 | 151.69 | 137.28 | 139.66 | 123.16 | 104.47 | 100.77 | 88.76 | 84.96 | 76.61 | 77.94 | 85.96 | 94.38 | 97.60 | 123.42 | 116.78 | 120.53 |
The cash conversion cycle of Tandem Diabetes Care Inc has shown fluctuations over the given period, ranging from a high of 151.69 days on December 31, 2023, to a low of 76.61 days on December 31, 2021. This cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
In general, a shorter cash conversion cycle indicates that the company is able to efficiently manage its working capital and generate cash flows from its operating activities. A longer cash conversion cycle may indicate inefficiencies in inventory management, sales collection, or payment practices, which could tie up cash and impact the company's liquidity.
The company experienced a notable improvement in its cash conversion cycle from December 2023 to June 2024, where the cycle decreased from 151.69 days to 145.52 days. However, there was a significant reduction in efficiency in the subsequent quarter, with the cycle increasing to 101.49 days on September 30, 2024.
It is important for Tandem Diabetes Care Inc to consistently monitor and manage its cash conversion cycle to optimize its working capital management and ensure healthy liquidity levels. By identifying and addressing the factors contributing to fluctuations in the cycle, the company can improve its cash flow performance and overall financial health.