Adtalem Global Education Inc (ATGE)
Liquidity ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.86 | 1.11 | 1.32 | 3.71 | 2.00 |
| Quick ratio | 0.74 | 0.87 | 1.05 | 1.38 | 1.72 |
| Cash ratio | 0.48 | 0.63 | 0.86 | 1.21 | 1.47 |
Adtalem Global Education Inc's liquidity ratios have shown a declining trend over the past five years based on the data provided. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has decreased from 3.71 in 2021 to 0.86 in 2024. This indicates that the company may be facing challenges in meeting its short-term obligations.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also declined from 1.38 in 2021 to 0.74 in 2024. This suggests that Adtalem Global Education Inc may be struggling to quickly convert its most liquid assets into cash to meet immediate financial needs.
Furthermore, the cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents in relation to current liabilities, has decreased from 1.47 in 2020 to 0.48 in 2024. This indicates a decrease in the company's ability to cover its short-term liabilities solely with its cash resources.
Overall, the declining trend in Adtalem Global Education Inc's liquidity ratios raises concerns about its short-term financial health and ability to meet its obligations. Further analysis and monitoring of the company's liquidity position may be warranted to assess its overall financial stability and solvency.
Additional liquidity measure
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 1.92 | 3.58 | 6.16 | 11.60 | 18.32 |
The cash conversion cycle of Adtalem Global Education Inc has shown a decreasing trend over the past five years. In June 2020, the company's cash conversion cycle was 18.32 days, indicating that it took the company almost three weeks to convert its investments in inventory and accounts receivable into cash.
However, there has been a significant improvement in the efficiency of the company's cash conversion cycle since then. By June 2024, the cash conversion cycle had decreased to 1.92 days, reflecting a substantial enhancement in the company's ability to convert its resources into cash quickly.
This positive trend suggests that Adtalem Global Education Inc has been managing its inventory and receivables more efficiently, leading to a faster conversion of investments into cash. A shorter cash conversion cycle indicates improved liquidity and working capital management, which can enhance the company's financial stability and sustainability.