Bill Com Holdings Inc (BILL)

Bill Com Holdings Inc has shown an improving trend in its current ratio from 1.42 in June 30, 2020, to 1.78 in June 30, 2023, followed by a slight decrease to 1.55 as of June 30, 2024. This indicates the company's ability to cover its short-term obligations with its current assets has been generally strengthening over the years.

In terms of quick ratio, the company's liquidity position has improved from 0.42 in June 30, 2020, to 0.72 in June 30, 2023, before declining to 0.40 as of June 30, 2024. This ratio measures the ability to meet short-term liabilities with its most liquid assets, showing some fluctuations but generally indicating an adequate level of liquidity.

Similarly, the cash ratio has depicted a positive trend, increasing from 0.42 in June 30, 2020, to 0.71 in June 30, 2023, followed by a slight decrease to 0.39 as of June 30, 2024. The cash ratio focuses on the company's ability to cover its short-term obligations with its cash and cash equivalents, showing a slightly decreasing level of liquidity in the most recent period.

Overall, Bill Com Holdings Inc has maintained a relatively healthy liquidity position over the years, as indicated by the current, quick, and cash ratios, although there has been some fluctuation in the ratios in the most recent year. These ratios suggest that the company has the ability to meet its short-term obligations and is managing its liquidity effectively.

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Additional liquidity measure

The cash conversion cycle is a crucial metric for understanding how efficiently a company manages its working capital. The cash conversion cycle of Bill Com Holdings Inc has shown variation over the years based on the provided data.

As of June 30, 2020, the cash conversion cycle was exceptionally low at 0.96 days, indicating that the company efficiently converted its investments in inventory and receivables into cash.

However, the cash conversion cycle significantly extended in the following years, reaching 15.40 days on June 30, 2021, and further increasing to 15.52 days on June 30, 2022. These higher values suggest that the company took longer to convert its resources into cash during these periods.

A significant spike is observed on June 30, 2023, with a drastic increase to 1,190.01 days in the cash conversion cycle. Such a substantial rise may signal inefficiencies in managing inventory, collecting receivables, or delays in settling payables.

The cash conversion cycle improved notably by June 30, 2024, dropping to 9.66 days, indicating a potential enhancement in the company's working capital management compared to the previous year.

Overall, the fluctuation in Bill Com Holdings Inc's cash conversion cycle over the years highlights the importance of efficient working capital management for sustaining liquidity and financial health. Constant monitoring and improvement in this cycle are essential for ensuring the company's operational efficiency and profitability.