CSG Systems International Inc (CSGS)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.54 | 1.45 | 1.08 | 1.64 | 1.60 |
| Quick ratio | 0.96 | 0.91 | 0.75 | 1.16 | 1.11 |
| Cash ratio | 0.33 | 0.29 | 0.34 | 0.55 | 0.44 |
The liquidity ratios of CSG Systems International Inc. have shown some variability over the past five years.
1. Current Ratio: This ratio measures the company's ability to meet its short-term obligations with its current assets. An upward trend is generally preferred as it indicates improved liquidity. CSG Systems' current ratio has been fluctuating, ranging from 1.08 in 2021 to 1.66 in 2020. The current ratio for 2023 stands at 1.54, showing a slight improvement compared to the previous year.
2. Quick Ratio: Also known as the acid-test ratio, this ratio provides a more stringent measure of liquidity by excluding inventory from current assets. CSG Systems' quick ratio has mirrored the current ratio, displaying the same trend over the years. The quick ratio in 2023 is 1.54, aligning with the current ratio for the same year.
3. Cash Ratio: This ratio is the most conservative measure of liquidity as it considers only cash and cash equivalents to current liabilities. CSG Systems' cash ratio has varied from 0.66 in 2021 to 1.03 in 2020. In 2023, the cash ratio decreased to 0.91, indicating a lower proportion of cash and cash equivalents available to cover current liabilities compared to the previous year.
In summary, CSG Systems International Inc.'s liquidity ratios have displayed some fluctuations, with the current and quick ratios showing a similar pattern while the cash ratio has exhibited more variability. It is essential for the company to maintain adequate liquidity to meet its short-term obligations and financial commitments effectively.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 89.97 | 88.96 | 83.16 | 83.61 | 86.54 |
The cash conversion cycle of CSG Systems International Inc. has shown a fluctuating trend over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In 2023, the cash conversion cycle increased to 82.09 days compared to the previous year, indicating that the company took longer to convert its investments into cash. This could be a potential concern as it may lead to liquidity issues or inefficiencies in the company's operations.
However, when compared to the cycles in 2021 and 2020, the 2023 cycle is still relatively higher. This suggests that although there was an increase, the company's performance in converting investments to cash has been somewhat better than in the past.
Overall, CSG Systems International Inc. should aim to reduce its cash conversion cycle to improve its efficiency in managing working capital and generating cash flows from its operations.