A10 Network (ATEN)

A10 Networks Inc's liquidity ratios have been relatively stable over the past five years. The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, shows an improving trend from 2.26 in 2019 to 2.45 in 2023. This indicates that A10 Networks has a strong capacity to cover its current liabilities with its current assets.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. A10 Networks' quick ratio has also shown a positive trend, increasing from 2.03 in 2019 to 2.24 in 2023. This suggests that the company has a solid ability to settle its short-term liabilities without relying on inventory sales.

Lastly, the cash ratio, which is the most conservative liquidity ratio, measures the company's ability to cover its current liabilities with its cash and cash equivalents. A10 Networks' cash ratio has fluctuated over the years but has generally been above 1.0, indicating that the company holds sufficient cash to meet its immediate obligations.

Overall, A10 Networks Inc's liquidity ratios demonstrate a strong position in terms of its ability to meet short-term financial obligations. The improvement in these ratios over the years indicates effective management of working capital and a healthy liquidity position.

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Additional liquidity measure

The cash conversion cycle of A10 Networks Inc has shown some fluctuations over the past five years. As of December 31, 2023, the cash conversion cycle has increased to 233.31 days from 178.24 days in the previous year. This indicates that it took the company longer to convert its investments in inventory and accounts receivable into cash during the most recent financial period.

Comparing the current cycle to the data from previous years, it is evident that A10 Networks Inc's cash conversion cycle has been somewhat volatile. The cycle was relatively lower in 2022 at 178.24 days, but it had increased from 2021 (196.69 days), 2020 (198.20 days), and 2019 (202.41 days).

The upward trend in the cash conversion cycle may suggest potential inefficiencies in managing inventory levels, collecting receivables, or negotiating payment terms with suppliers. A longer cash conversion cycle means that the company has funds tied up in operating activities for a longer duration before realizing cash inflows.

It is essential for A10 Networks Inc to analyze the underlying reasons for the extended cash conversion cycle and implement strategies to optimize working capital management. By improving inventory turnover, expediting accounts receivable collection, and negotiating favorable payment terms, the company can potentially shorten its cash conversion cycle and enhance its overall liquidity position.