Viatris Inc (VTRS)

Based on the provided data, let's analyze the liquidity ratios of Viatris Inc:

1. Current Ratio:
- The current ratio is a measure of a company's ability to cover its short-term liabilities with its short-term assets.
- Viatris Inc's current ratio has shown fluctuations over the years. It was 1.22 in 2020, declined to 1.10 in 2021, and then increased to 1.58 in 2022, 1.67 in 2023, and remained stable at 1.65 in 2024.
- A current ratio above 1 indicates that Viatris Inc has more current assets than current liabilities, which is generally considered healthy for a company's liquidity.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets.
- Viatris Inc's quick ratio has been consistently low over the years, with values of 0.10 in 2020 and 2021, increasing to 0.22 in 2022, and then slightly decreasing to 0.15 in 2023 and 0.19 in 2024.
- A quick ratio below 1 may indicate that Viatris Inc may have difficulty meeting its short-term obligations using only its most liquid assets.

3. Cash Ratio:
- The cash ratio is the strictest measure of liquidity, focusing only on cash and cash equivalents relative to current liabilities.
- Viatris Inc's cash ratio mirrors the trend of the quick ratio, with values of 0.10 in 2020 and 2021, rising to 0.22 in 2022, and then decreasing to 0.15 in 2023 and 0.19 in 2024.
- A cash ratio below 1 signifies that Viatris Inc may not have enough cash on hand to cover its current liabilities on its own.

Overall, Viatris Inc's liquidity position, as indicated by the current, quick, and cash ratios, has shown variability over the years. While the current ratio suggests a relatively healthy liquidity position, the lower quick and cash ratios indicate that the company may need to improve its ability to meet short-term obligations with its most liquid assets, especially cash. Further analysis and monitoring of these ratios are recommended to assess Viatris Inc's liquidity management effectively.

---

Additional liquidity measure

The cash conversion cycle of Viatris Inc has shown a fluctuating trend over the past five years, indicating changes in its operational efficiency and ability to manage working capital effectively.

As of December 31, 2020, the cash conversion cycle stood at 245.08 days, reflecting a prolonged period for the company to convert its investments in inventory and accounts receivable into cash.

Subsequently, the company made significant improvements in its working capital management, as evidenced by the sharp decrease in the cash conversion cycle to 117.93 days by December 31, 2021. This indicates that Viatris Inc was able to streamline its operations and expedite the conversion of its assets into cash more effectively.

However, by December 31, 2022, the cash conversion cycle increased to 131.54 days, suggesting a slight slowdown in the company's ability to convert its working capital into cash. This trend continued in the following years, with the cash conversion cycle reaching 140.90 days by December 31, 2023 and further increasing to 154.32 days by December 31, 2024.

Overall, Viatris Inc should focus on optimizing its cash conversion cycle to ensure efficient management of its working capital and improve its liquidity position in the future.