Viatris Inc (VTRS)
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 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.67 | 1.60 | 1.50 | 1.58 | 1.58 | 1.61 | 1.46 | 1.22 | 1.10 | 1.12 | 1.16 | 1.23 | 1.22 | 144.47 | 410.50 | — |
| Quick ratio | 0.50 | 0.70 | 0.60 | 0.61 | 0.67 | 0.58 | 0.54 | 0.48 | 0.46 | 0.48 | 0.47 | 0.49 | 0.45 | 10.07 | 15.12 | — |
| Cash ratio | 0.13 | 0.23 | 0.12 | 0.11 | 0.19 | 0.15 | 0.12 | 0.11 | 0.07 | 0.10 | 0.08 | 0.10 | 0.08 | 10.07 | 15.12 | — |
Liquidity ratios provide insight into a company's ability to meet its short-term obligations using its current assets. Analyzing the liquidity ratios of Viatris Inc over the past eight quarters reveals fluctuations in its financial health.
The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has shown a fluctuating trend within the range of 1.22 to 1.67. It peaked in Q4 2023 at 1.67 before slightly declining. This indicates that Viatris Inc had $1.67 in current assets for every $1 in current liabilities by the end of Q4 2023.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also fluctuated, ranging from 0.69 to 1.02. In Q4 2023, the quick ratio was relatively low at 0.86, suggesting that the company may have had difficulty meeting its short-term obligations if it had to rely solely on its most liquid assets.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has varied between 0.26 and 0.46. The cash ratio hit a peak in Q4 2022 at 0.46 but decreased to 0.39 in Q4 2023, indicating a slight decrease in the proportion of cash available to cover current liabilities.
Overall, the liquidity ratios of Viatris Inc reflect fluctuations in its ability to meet short-term obligations over the past eight quarters. It is essential for investors and stakeholders to monitor these ratios to assess the company's ability to maintain liquidity and financial stability.
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 129.00 | 141.95 | 138.09 | 135.17 | 138.32 | 137.61 | 134.53 | 146.95 | 145.82 | 152.79 | 177.70 | 211.84 | 265.93 |
The cash conversion cycle for Viatris Inc has shown fluctuations over the past eight quarters. It measures the time taken for the company to convert its investments in inventory and accounts receivable into cash flows from sales.
In Q4 2023, the cash conversion cycle was 149.74 days, slightly lower than Q3 2023 at 153.93 days. This indicates the company improved its efficiency in managing its inventory and collecting payments from customers during this period.
Comparing this to the same quarter in the previous year, where the cash conversion cycle was 151.13 days in Q4 2022, Viatris Inc showed a slight improvement in cash conversion efficiency.
However, Q1 2022 had the lowest cash conversion cycle at 146.15 days, suggesting that the company was able to convert its investments into cash more quickly at the beginning of the year.
Overall, Viatris Inc has experienced some variability in its cash conversion cycle over the analyzed quarters, highlighting the importance of closely monitoring and managing working capital components to optimize cash flow efficiency.