CorVel Corp (CRVL)
Liquidity ratios
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | |
|---|---|---|---|---|---|
| Current ratio | 1.90 | 1.64 | 1.45 | 1.55 | 1.66 |
| Quick ratio | 1.35 | 1.10 | 0.91 | 1.05 | 1.26 |
| Cash ratio | 0.84 | 0.57 | 0.42 | 0.57 | 0.86 |
CorVel Corp's liquidity ratios show a mixed trend over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has been fluctuating slightly but generally remains above 1. This indicates that CorVel Corp has sufficient current assets to meet its current liabilities, with a noticeable improvement in 2025 at 1.90 compared to 1.45 in 2023.
On the other hand, the quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity. The trend for the quick ratio is less favorable than the current ratio, showing a decline over the years from 1.26 in 2021 to 1.35 in 2025. This indicates that CorVel Corp may have a decreasing ability to cover its short-term obligations with its most liquid assets.
Furthermore, the cash ratio, which is the most stringent liquidity ratio as it only considers cash and cash equivalents, has also shown a decreasing trend from 0.86 in 2021 to 0.84 in 2025. This suggests that CorVel Corp's ability to cover its current liabilities with its cash holdings has slightly deteriorated over the years.
In summary, while CorVel Corp maintains a current ratio above 1, indicating overall good liquidity, the declining trend in the quick and cash ratios may raise concerns about the company's ability to meet its short-term obligations using its most liquid assets.
Additional liquidity measure
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 42,436.87 | 34.96 | 31.35 | 36.24 | 32.24 |
The cash conversion cycle of CorVel Corp has shown some fluctuation over the years. As of March 31, 2021, the cash conversion cycle was 32.24 days, increased slightly to 36.24 days by March 31, 2022, decreased to 31.35 days by March 31, 2023, and rose to 34.96 days by March 31, 2024. However, there appears to be a significant anomaly on March 31, 2025, where the cash conversion cycle skyrocketed to an unusually high number of 42,436.87 days, which might be due to an error in data reporting or calculation.
Overall, the cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has exhibited some variability for CorVel Corp. Monitoring this metric closely and investigating the significant spike observed in 2025 would be advisable to ensure optimal management of working capital and cash flow efficiency.