Cogent Communications Group Inc (CCOI)

A decreasing trend is observed in Cogent Communications Holdings Inc's liquidity ratios over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has decreased from 5.30 in 2019 to 1.38 in 2023. This indicates a decline in the company's short-term liquidity position.

Similarly, the quick ratio, a more stringent measure of liquidity excluding inventory, has experienced a downward trend from 5.30 in 2019 to 1.27 in 2023. This implies that the company may struggle to meet its immediate payment obligations without relying on inventory.

Furthermore, the cash ratio, which indicates the proportion of cash and cash equivalents to current liabilities, has also declined over the years. The ratio has decreased from 4.85 in 2019 to 0.91 in 2023, suggesting a reduction in the company's ability to cover its short-term obligations solely with cash holdings.

Overall, the decreasing liquidity ratios raise concerns about Cogent Communications Holdings Inc's ability to efficiently manage its short-term financial obligations. Further analysis and monitoring of the company's liquidity management strategies may be necessary to address this downward trend and mitigate potential liquidity risks.

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Additional liquidity measure

The cash conversion cycle for Cogent Communications Holdings Inc has fluctuated over the past five years. In 2019, the company had a cash conversion cycle of 8.66 days, indicating that it took approximately 8.66 days to convert its investments in inventory and other resources into cash received from its customers.

In 2020, the cash conversion cycle increased to 12.11 days, suggesting that the company took slightly longer to convert its investments into cash flow. However, in the following year (2021), the cycle decreased to 6.73 days, indicating an improvement in the company's efficiency in managing its working capital.

In 2022, the cash conversion cycle turned negative, standing at -16.67 days. This negative value suggests that the company was able to convert its investments into cash flow at a faster rate than its payables came due.

By the end of 2023, the cash conversion cycle increased to 20.12 days, signifying that Cogent Communications Holdings Inc generally took longer to convert its investments into cash compared to the previous year.

Overall, the trend in the cash conversion cycle for Cogent Communications Holdings Inc has been somewhat volatile, with fluctuations indicating changes in the efficiency of the company's working capital management.