Digi International Inc (DGII)
Liquidity ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.73 | 1.93 | 1.72 | 4.18 | 2.78 |
| Quick ratio | 1.09 | 1.02 | 0.88 | 3.33 | 1.85 |
| Cash ratio | 0.31 | 0.37 | 0.36 | 2.59 | 0.88 |
Analysis of Digi International Inc's liquidity ratios reveals fluctuations over the past five years.
The current ratio, a measure of the company's ability to pay its short-term obligations with its current assets, decreased from 4.18 in 2021 to 1.73 in 2024. This suggests a decline in the company's liquidity position, as it now has fewer current assets to cover its current liabilities.
The quick ratio, which excludes inventory from current assets in the calculation, also shows a declining trend from 3.33 in 2021 to 1.09 in 2024. This indicates that the company may be less able to meet its short-term liabilities without relying on selling inventory.
The cash ratio, a more stringent measure of liquidity that only considers cash and cash equivalents, has been volatile but generally decreasing over the years. A decrease in the cash ratio from 2.59 in 2021 to 0.31 in 2024 may signal potential challenges in meeting immediate cash needs.
Overall, Digi International Inc's liquidity ratios reflect a mixed performance, with varying levels of liquidity and potential vulnerabilities to meet short-term obligations. Further analysis of the company's cash management practices and working capital efficiency may be warranted to assess its liquidity position accurately.
Additional liquidity measure
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 121.98 | 154.41 | 134.15 | 106.58 | 140.81 |
The cash conversion cycle of Digi International Inc has fluctuated over the past five years, with a range from 106.58 days to 154.41 days. In 2024, the company's cash conversion cycle improved to 121.98 days compared to the previous year, indicating that Digi International Inc was able to convert its investments in inventory and accounts receivable into cash more efficiently. This could be attributed to better inventory management and collection of receivables.
The trend in the cash conversion cycle between 2020 and 2024 suggests that Digi International Inc has made efforts to streamline its operations and improve its working capital management. However, the company should continue to focus on optimizing its inventory turnover and collections from customers to further enhance its efficiency in converting assets into cash.
Overall, a lower cash conversion cycle indicates that Digi International Inc is able to generate cash more quickly from its operating cycle, which is a positive indicator of the company's financial health and operational efficiency.