United Therapeutics Corporation (UTHR)

The liquidity ratios of United Therapeutics Corporation show a strong position over the years based on the provided data. The current ratio has consistently improved from 6.70 in 2020 to 9.85 in 2022, indicating that the company has more than enough current assets to cover its short-term liabilities. However, there was a significant decrease in 2023 and 2024, with the ratio dropping to 4.41 and 5.25 respectively, suggesting a potential challenge in meeting short-term obligations in those years.

Similarly, the quick ratio paints a similar picture, with a positive trend from 5.68 in 2020 to 8.27 in 2022, showing the company's ability to meet its short-term obligations without relying heavily on inventory. Nevertheless, there was a decrease to 3.72 and 4.43 in 2023 and 2024, indicating a slight deterioration in the company's ability to cover immediate liabilities using only its most liquid assets.

The cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, displays a similar trend to the quick ratio. The company had a healthy cash ratio of 6.32 in 2021 and 8.27 in 2022, suggesting a strong ability to pay off short-term debts with cash on hand. However, the ratio declined slightly to 3.72 in 2023 and 4.43 in 2024, indicating a potential decrease in the company's immediate liquidity position.

Overall, while the liquidity ratios of United Therapeutics Corporation have shown strength and improvement over the years, the decline in 2023 and 2024 warrants a closer look into the company's ability to manage its short-term obligations effectively and maintain its liquidity position in the future.

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Additional liquidity measure

United Therapeutics Corporation's cash conversion cycle has shown an improvement over the years as it decreased from 292.07 days in December 2020 to 186.09 days in December 2024. This trend indicates that the company has been managing its cash flows more efficiently. A shorter cash conversion cycle suggests that the company is taking less time to convert its investments in inventory and other resources into cash receipts from sales. This may be attributed to better inventory management, more effective accounts receivable collection, and optimized accounts payable processes. Overall, the decreasing trend in the cash conversion cycle reflects improved liquidity and working capital management for United Therapeutics Corporation.