Vir Biotechnology Inc (VIR)

Based on the provided data for Vir Biotechnology Inc, we can observe the following trends in the liquidity ratios over the years:

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term liabilities with its current assets.
- The current ratio decreased from 7.80 in 2020 to 4.58 in 2021, indicating a decline in liquidity.
- However, the ratio improved in the following years, reaching 9.05 in 2023 before slightly decreasing to 8.71 in 2024.
- Overall, the current ratio for Vir Biotechnology Inc remained at a comfortable level above 1 across all years, suggesting a healthy liquidity position.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets.
- Vir Biotechnology Inc's quick ratio saw a significant decrease from 7.44 in 2020 to 2.08 in 2021, signaling potential liquidity challenges.
- However, the company was able to improve its quick ratio in the subsequent years, reaching 8.68 in 2023 and 8.28 in 2024.
- The increasing trend in the quick ratio indicates a strengthening liquidity position and a better ability to cover short-term obligations without relying on inventory.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, focusing solely on a company's ability to cover its current liabilities with cash and cash equivalents.
- Vir Biotechnology Inc's cash ratio mirrored the trend of the quick ratio, falling from 7.44 in 2020 to 2.08 in 2021 and then recovering to 8.28 in 2024.
- The rising cash ratio over the years indicates an enhanced ability to meet short-term obligations using readily available cash resources.

In summary, Vir Biotechnology Inc demonstrated fluctuations in its liquidity ratios over the years, with an initial decline followed by an improvement in liquidity position. The company maintained a current ratio above 1, indicating a sufficient buffer to meet short-term obligations. The upward trajectory of the quick and cash ratios suggests a strengthened ability to cover liabilities without relying on inventory, showcasing a positive trend in the company's liquidity management.

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Additional liquidity measure

The cash conversion cycle of Vir Biotechnology Inc has shown fluctuations over the years. In December 2020, the company had a cash conversion cycle of 0.00 days, indicating a quick turnover of cash and efficient management of working capital. However, in December 2021, the cash conversion cycle increased significantly to 47.62 days, suggesting potential inefficiencies in managing cash, inventory, and receivables.

Subsequently, in December 2022, the cash conversion cycle reverted to 0.00 days, which may indicate a corrective action taken by the company to streamline its operational processes. However, for the following years (December 2023 and December 2024), the cash conversion cycle remained at 0.00 days, indicating consistent and efficient management of cash flow and working capital during this period.

Overall, the company should continue to monitor its cash conversion cycle to ensure timely collection of receivables, efficient inventory management, and optimized payment of liabilities to maintain a healthy cash flow position and operational efficiency.