Agilysys Inc (AGYS)

Agilysys Inc's liquidity ratios have shown varying trends over the past five years. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has generally been above 1, indicating that Agilysys Inc has had more than enough current assets to cover its current liabilities. The current ratio has fluctuated between 1.35 and 2.18, with a higher ratio in 2021 and 2024 compared to 2020 and 2022.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown a similar pattern of fluctuations. Agilysys Inc's quick ratio has ranged from 1.19 to 2.04, with a higher ratio in 2021 and 2024 compared to 2020 and 2022. This indicates that the company may have had a stronger ability to meet its short-term obligations without relying on inventory in those years.

Looking at the cash ratio, which measures the company's ability to cover current liabilities with its cash and cash equivalents, Agilysys Inc has shown an increasing trend over the five-year period. The cash ratio has increased from 0.67 in 2020 to 1.62 in 2024, suggesting that the company has improved its liquidity position by holding more cash relative to its current liabilities.

Overall, Agilysys Inc's liquidity ratios demonstrate a generally stable and healthy liquidity position over the past five years, with improvements in the cash ratio indicating a stronger ability to cover short-term obligations with cash reserves. However, fluctuations in the current and quick ratios highlight the importance of monitoring liquidity closely to ensure the company can meet its obligations efficiently.

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Additional liquidity measure

The cash conversion cycle of Agilysys Inc has shown a decreasing trend over the past five years, indicating an improvement in the company's efficiency in managing its cash flows. The cycle decreased from 65.74 days in 2020 to 37.22 days in 2024, reflecting a more streamlined process of converting resources into cash.

A shorter cash conversion cycle signifies that the company is able to convert inventory into cash more quickly, which can be seen as a positive sign of operational efficiency. Agilysys Inc has managed to reduce the time it takes to sell inventory, collect receivables, and pay its payables, leading to a more favorable cash position.

Overall, the decreasing trend in the cash conversion cycle of Agilysys Inc indicates an improvement in the company's working capital management and efficiency in converting its operating cycle into cash, which can positively impact its liquidity and financial health.