Cogent Communications Group Inc (CCOI)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.38 | 1.63 | 1.72 | 2.58 | 3.04 | 3.40 | 4.52 | 4.31 | 5.06 | 4.41 | 4.85 | 0.75 | 4.83 | 4.99 | 4.97 | 5.07 | 5.30 | 5.50 | 5.39 | 4.09 |
| Quick ratio | 0.56 | 0.55 | 0.68 | 1.80 | 2.23 | 2.57 | 3.68 | 3.53 | 4.46 | 4.00 | 4.46 | 0.66 | 4.40 | 4.57 | 4.57 | 4.64 | 4.90 | 5.07 | 4.88 | 5.38 |
| Cash ratio | 0.20 | 0.31 | 0.46 | 1.45 | 1.86 | 2.21 | 3.22 | 3.07 | 3.95 | 3.55 | 3.99 | 0.56 | 3.93 | 4.13 | 4.17 | 4.16 | 4.45 | 4.60 | 4.43 | 4.90 |
Cogent Communications Holdings Inc's liquidity ratios have shown a decline over the quarters analyzed. The current ratio, which measures the company's ability to meet short-term obligations with current assets, has decreased from 3.04 in Q4 2022 to 1.38 in Q4 2023. This indicates a reduction in the company's short-term liquidity position.
Similarly, the quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also shown a downward trend from 2.61 in Q4 2022 to 1.27 in Q4 2023. This suggests that the company may have a reduced ability to meet its short-term obligations without relying on inventory.
The cash ratio, which reflects the company's ability to cover immediate liabilities with cash and cash equivalents, has also decreased from 2.24 in Q4 2022 to 0.91 in Q4 2023. This indicates a lower level of cash reserves relative to immediate liabilities.
Overall, the declining trend in Cogent Communications Holdings Inc's liquidity ratios raises concerns about the company's ability to meet its short-term financial obligations. Management may need to closely monitor liquidity levels and implement strategies to enhance cash flow and liquid asset reserves in order to improve the company's liquidity position.
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 35.88 | 55.40 | 65.96 | 57.60 | 54.42 | 71.78 | 61.36 | 53.05 | 33.98 | 23.19 | 18.05 | 18.62 | 23.93 | 17.25 | 16.12 | 17.20 | 17.61 | 20.71 | 18.67 | 19.61 |
The cash conversion cycle of Cogent Communications Holdings Inc has shown variability over the past eight quarters. In Q4 2023, the company's cash conversion cycle increased to 20.12 days from 13.64 days in Q3 2023. This implies that it took Cogent Communications Holdings Inc an average of 20.12 days to convert its investments in inventory into cash received from customers during the fourth quarter of 2023.
Looking back at the trend in the previous quarters, the company's cash conversion cycle has generally been positive, except for Q1 2023 where it was negative at -2.15 days. This indicates that in that particular quarter, Cogent Communications Holdings Inc was able to convert its investments in inventories into cash and receive cash from customers before paying off its suppliers, leading to a negative cash conversion cycle.
In comparison to the same quarter in the previous year, the cash conversion cycle has increased significantly in Q4 2023, as it was -16.67 days in Q4 2022. This suggests that in Q4 2023, Cogent Communications Holdings Inc took longer to convert its investments in inventory into cash received from customers compared to the same quarter in the previous year.
Overall, Cogent Communications Holdings Inc should strive to optimize its cash conversion cycle by managing its inventory levels efficiently, collecting receivables promptly, and extending payment terms with suppliers strategically to improve its working capital management and overall financial performance.