ANSYS Inc (ANSS)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 3.01 3.11 2.95 2.80 2.30 2.43 2.20 2.13 2.09 2.38 2.12 2.28 2.10 2.93 2.72 2.66 2.36 2.60 2.38 2.40
Quick ratio 2.69 2.79 2.64 2.49 1.96 2.13 1.91 1.81 1.77 2.08 1.81 1.95 1.78 2.64 2.44 2.31 2.03 2.26 2.09 2.05
Cash ratio 1.59 1.72 1.58 1.52 0.97 1.01 0.74 0.78 0.77 1.04 0.83 1.04 0.86 1.80 1.61 1.58 1.25 1.50 1.37 1.34

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

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets.
- ANSYS Inc's current ratio has been fluctuating over the past few years, ranging from a low of 2.10 on December 31, 2021, to a high of 3.11 on September 30, 2024.
- Generally, a current ratio of 2 or higher is considered healthy, indicating that ANSYS Inc has sufficient current assets to meet its short-term obligations.

2. Quick Ratio (Acid-Test Ratio):
- The quick ratio provides a more conservative measure of liquidity as it excludes inventory from current assets.
- ANSYS Inc's quick ratio has also varied during the period, with values ranging from a low of 1.77 on December 31, 2022, to a high of 2.79 on September 30, 2024.
- A quick ratio above 1 suggests that ANSYS Inc can meet its short-term liabilities without relying on selling inventory, which is a positive sign.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, focusing solely on the company's ability to cover current liabilities with cash and cash equivalents.
- ANSYS Inc's cash ratio has shown fluctuations, with values ranging from 0.74 on June 30, 2023, to 1.80 on September 30, 2021.
- A cash ratio above 1 indicates that ANSYS Inc holds more cash and cash equivalents than current liabilities, which can be seen as a strong position.

In summary, ANSYS Inc has generally maintained healthy liquidity levels over the analyzed period, as indicated by current, quick, and cash ratios consistently above 1. The company's ability to meet short-term obligations and its prudent management of current assets are reflected in these liquidity ratios. However, it is essential to monitor these ratios continuously to ensure the company's ongoing ability to meet its financial obligations and fund its operations.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days 112.52 98.47 84.26 75.17 111.93 99.65 106.35 81.86 119.05 89.63 87.88 84.09 121.93 80.58 86.29 69.19 93.28 81.71 74.20 67.88

The cash conversion cycle of ANSYS Inc has shown fluctuations over the periods analyzed. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged between 67.88 days and 112.52 days. A lower number of days indicates that the company is efficiently managing its cash flows and resources. On the other hand, a higher number of days may imply that the company is taking longer to convert its investments into cash, potentially affecting liquidity.

The cycle peaked at 121.93 days on December 31, 2021, suggesting a potential issue with inventory management or delayed collections. However, there was a significant improvement in the cycle by March 31, 2024, with a decrease to 75.17 days, signaling better efficiency in converting resources into cash.

Overall, maintaining a healthy cash conversion cycle is crucial for ANSYS Inc to sustain its operations effectively, manage working capital efficiently, and ensure strong financial performance.