Dayforce Inc. (DAY)

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 1.12 1.09 1.10 1.07 1.07 1.07 1.06 1.05 1.11 1.07 1.11 1.09 1.07 1.23 1.22 1.08 1.07 1.10 1.06 1.04
Quick ratio 0.15 0.09 0.11 0.07 0.12 0.09 0.07 0.05 0.14 0.07 0.10 0.08 0.08 0.38 0.36 0.50 0.42 0.27 0.52 0.58
Cash ratio 0.11 0.09 0.11 0.07 0.09 0.09 0.07 0.05 0.10 0.07 0.10 0.08 0.05 0.38 0.36 0.50 0.40 0.27 0.52 0.58

Dayforce Inc.'s liquidity ratios, including the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term financial obligations.

The current ratio measures the company's ability to cover its short-term liabilities with its current assets. Over the period observed, Dayforce Inc.'s current ratio has generally been above 1, indicating that it has more current assets than current liabilities, which is a positive sign. However, the current ratio fluctuates slightly, ranging from 1.05 to 1.12, showing some variability in the company's liquidity position.

The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets. Dayforce Inc.'s quick ratio is quite low, ranging from 0.05 to 0.50 over the period. This may raise concerns about the company's ability to meet its short-term obligations without relying on selling inventory.

The cash ratio is the most conservative liquidity ratio since it only considers cash and cash equivalents to cover current liabilities. Dayforce Inc.'s cash ratio fluctuates but generally shows a low level of cash relative to its short-term obligations, ranging from 0.05 to 0.58. This suggests that the company may need to improve its cash position to better meet its short-term requirements.

In summary, while Dayforce Inc. generally maintains a current ratio above 1, indicating a satisfactory ability to cover its short-term liabilities, the low quick and cash ratios suggest that the company may need to focus on improving its liquidity position, possibly by increasing its cash reserves.

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 28.45 2,169.36 1,873.11 2,864.91 2,004.08 -27.59 -25.94 -26.10 2,035.79 3,242.97 2,054.76 2,976.89 2,755.17 1,960.03 2,021.33 2,819.08 2.66 2,128.46 3,345.27 3,843.45

The cash conversion cycle of Dayforce Inc. has shown significant fluctuations over the periods listed. It measures how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

From the data, it is evident that Dayforce Inc. experienced a highly volatile cash conversion cycle over the observed periods. The cycle ranged from negative days (implying the company was operating with negative working capital) to several thousand days, which may be indicative of inefficiencies in managing working capital.

In the most recent period, the cash conversion cycle was 28.45 days, indicating that the company takes approximately 28 days to convert its investments in inventory and resources into cash. This suggests a relatively efficient management of working capital compared to some of the earlier periods of excessively long cash conversion cycles.

Overall, the analysis of Dayforce Inc.'s cash conversion cycle highlights the importance of effectively managing working capital to optimize cash flows and overall financial performance. The company would benefit from strategies that streamline its operating cycle and reduce the time it takes to convert investments into cash.