Agilysys Inc (AGYS)

Agilysys Inc's liquidity ratios indicate its ability to meet short-term obligations and are generally stable over the years. The current ratio, which measures the company's ability to cover its current liabilities with current assets, shows a slight fluctuation from 2.18 in 2021 to 1.91 in 2022, before improving to 2.11 in 2024. This suggests that Agilysys has generally had more than enough current assets to cover its short-term liabilities over the years.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, follows a similar trend. The ratio decreases from 2.09 in 2021 to 1.73 in 2022 but then improves to 1.98 in 2024. This indicates that Agilysys may have some reliance on inventory to meet its short-term obligations but has managed to strengthen its liquidity position in recent years.

The cash ratio, which focuses solely on the ability to cover current liabilities with cash and cash equivalents, also displays a consistent pattern of improvement. The ratio declines from 1.63 in 2021 to 1.36 in 2022 but then increases to 1.62 in 2024. This suggests that Agilysys has maintained a healthy level of liquid assets relative to its current liabilities, providing a strong safety buffer.

Overall, Agilysys Inc's liquidity ratios indicate a relatively stable and healthy liquidity position over the years, with some fluctuations that are common in dynamic business environments. These ratios suggest that the company has maintained a solid ability to meet its short-term financial obligations as they come due.

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Additional liquidity measure

The cash conversion cycle is a critical measure of a company's efficiency in managing its working capital. Agilysys Inc's cash conversion cycle has shown some fluctuation over the years.

As of March 31, 2021, the company's cash conversion cycle was 35.29 days, indicating that it took Agilysys approximately 35 days to convert its investments in inventory and receivables into cash.

By March 31, 2022, the cash conversion cycle had increased to 43.36 days, which suggests a slight delay in converting working capital into cash compared to the previous year.

In the following year, as of March 31, 2023, the cash conversion cycle further extended to 47.05 days, indicating a continued challenge for Agilysys in efficiently managing its working capital.

The trend reversed significantly by March 31, 2024, where the cash conversion cycle decreased to 29.83 days. This improvement suggests that Agilysys was able to convert its working capital into cash more efficiently during that period.

Surprisingly, by March 31, 2025, the cash conversion cycle was reported as 0.00 days, which might indicate an anomaly in the data recording or a significant improvement in Agilysys' working capital management efficiency, possibly achieving immediate cash conversion.

Overall, the trend of Agilysys Inc's cash conversion cycle shows variations over the years, emphasizing the importance of closely monitoring and managing working capital to ensure optimal cash flow and operational efficiency.