Adtalem Global Education Inc (ATGE)

The analysis of Adtalem Global Education Inc.'s liquidity ratios over the specified period reveals notable fluctuations and trends.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, experienced significant variation from September 2020 to June 2025. It peaked at 3.92 on March 31, 2021, indicating a strong liquidity position at that time, then steadily declined thereafter, reaching a low of 0.76 on March 31, 2024. Following this trough, there was a modest recovery, with the ratio increasing to 1.06 by December 2024, but it declined again to 0.82 by June 2025. Overall, this trend suggests a weakening in the company's short-term liquidity position over time, with periods of relative strength interspersed with declines.

The quick ratio, which excludes inventories from current assets and provides a more conservative measure of liquidity, followed a similar pattern. It was highest at 1.74 on March 31, 2022, reflecting better immediate liquidity, but then experienced a downward trend, reaching a low of 0.67 on March 31, 2024. Post-2024, the quick ratio showed some marginal improvement, rising to 0.73 by June 2025. This indicates diminishing ability to rapidly cover short-term liabilities solely with the most liquid assets, notwithstanding some partial recoveries.

The cash ratio, the most conservative liquidity measure focusing solely on cash and cash equivalents, exhibited a declining trend throughout the period. The ratio peaked at 1.55 on March 31, 2022, signaling high immediate liquidity at that point, but then substantially declined, reaching as low as 0.39 by June 2025. This persistent decline suggests that the company's cash position relative to its short-term liabilities has weakened considerably, which may reflect either increased obligations or reduced cash reserves.

In summary, Adtalem Global Education Inc. has experienced a consistent deterioration in liquidity metrics from 2021 onward, with all three ratios indicating a decreasing ability to meet short-term obligations using current assets, quick assets, and cash. The declining levels across these ratios imply potential liquidity challenges, which are accentuated by the periods of liquidity weakening despite occasional minor recoveries.

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Additional liquidity measure

The cash conversion cycle (CCC) for Adtalem Global Education Inc. demonstrates a predominantly negative value throughout the analyzed periods, indicating that the company generally receives cash from its operations before disbursing payments to suppliers and creditors.

From September 30, 2020, through June 30, 2021, the CCC was relatively close to zero or slightly negative, ranging from -2.85 to -9.34 days. This signifies that collections from students or other receivables are somewhat well-aligned with the company's payable cycle, allowing it to operate with minimal net working capital.

A noticeable shift occurred starting September 30, 2021, when the CCC significantly declined to -27.01 days, suggesting an increased speed in cash inflows relative to outflows. Over the subsequent periods, the CCC exhibited fluctuations but remained mostly negative, with the value reaching as low as -27.01 days in September 2021 and showing periods of partial recovery—such as -13.88 days at the end of 2021 and -12.97 days in early 2022.

In the latter part of 2022 and into 2023, the CCC displayed signs of variability, oscillating between approximately -7 and -19 days, yet maintaining a negative stance overall. Notably, the CCC deepened again on June 30, 2024, to -25.55 days, indicating a peak in cash receipt efficiency relative to disbursements, before improving somewhat to -2.33 days by the end of 2024.

In 2025, the trend continued to show fluctuations, with the CCC briefly improving to around -14 days in the first quarter, then reverting to more negative values such as -20.74 days by June 30, 2025.

Overall, the considerable negative values across all periods suggest that Adtalem maintains a cash conversion cycle where cash inflows substantially precede outflows, enabling a level of operational liquidity and possibly reflecting efficient collection practices or favorable payment terms. The cyclical nature of the CCC indicates periods of tightening and loosening in working capital management, but the general trend aligns with a strategy of early cash collection and controlled payables management.