Shockwave Medical Inc. (NASDAQ:SWAV)

The current ratio exhibited considerable fluctuation between 2019 and 2023. Initially strong, the ratio decreased significantly before recovering to levels exceeding the initial period.

Current Ratio Trend

The current ratio began at 9.03 in 2019 and increased slightly to 9.63 in 2020, indicating a consistently strong ability to cover short-term liabilities with short-term assets. A substantial decrease was then observed in 2021, with the ratio falling to 5.54. This suggests a relative increase in short-term obligations or a decrease in liquid assets. The ratio partially recovered in 2022, reaching 7.25, before experiencing a significant increase to 11.76 in 2023. This latest value represents the highest observed during the analyzed period.

The substantial growth in current assets, particularly in 2023, appears to be the primary driver of the increasing current ratio. While current liabilities also increased over the period, the growth in assets outpaced the growth in liabilities, resulting in the observed trend. The decrease in 2021 warrants further investigation to understand the specific factors contributing to the reduced liquidity position at that time.

Asset and Liability Relationship

Throughout the period, current assets consistently exceeded current liabilities by a significant margin. However, the magnitude of this difference varied. The ratio’s fluctuations indicate changes in the composition or turnover of current assets relative to current liabilities. The substantial increase in both current assets and current liabilities in 2023 suggests a period of rapid growth and potentially increased operational activity.

Overall, the current ratio demonstrates a generally healthy liquidity position, although with notable variability. The recent increase to 11.76 in 2023 suggests a strong short-term financial standing, but the prior decrease in 2021 highlights the importance of ongoing monitoring of liquidity metrics.