Digi International Inc (DGII)

Current ratio

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Total current assets	US$ in thousands	166,198	166,208	246,658	170,058	192,547
Total current liabilities	US$ in thousands	85,978	96,507	58,941	61,230	44,458
Current ratio		1.93	1.72	4.18	2.78	4.33

September 30, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $166,198K ÷ $85,978K
= 1.93

The current ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations with its short-term assets. A current ratio of 1 or higher is generally considered acceptable, as it indicates that the company can cover its short-term liabilities with its current assets.

Analyzing Digi International, Inc.'s current ratio over the past five years, we can observe the following trends:

1. Sep 30, 2023: The current ratio is 1.93, indicating that the company has $1.93 in current assets for every $1 in current liabilities. This suggests a strong ability to cover its short-term obligations.

2. Sep 30, 2022: The current ratio decreased to 1.72 from the previous year. Although the ratio is still above 1, indicating the company's ability to meet its current liabilities, the decline may warrant further investigation into the cause of the decrease.

3. Sep 30, 2021: The current ratio significantly increased to 4.18, which reflects a substantial increase in the company's ability to cover its short-term obligations with current assets compared to the previous year. This level of liquidity could indicate an opportunity to invest in long-term assets or reduce short-term borrowings.

4. Sep 30, 2020: The current ratio declined to 2.78, signaling a reduction in liquidity compared to the previous year. While the ratio is still above 1, suggesting the company can cover its short-term liabilities, the decrease should be closely monitored for potential liquidity challenges.

5. Sep 30, 2019: The current ratio was at 4.33, indicating a high level of liquidity and the ability to comfortably meet short-term obligations with current assets.

In summary, Digi International, Inc.'s current ratio has shown fluctuations over the past five years. While the company generally maintained a current ratio above 1, indicating the ability to cover short-term obligations, the fluctuations suggest potential shifts in the company's liquidity position which should be carefully assessed to understand the underlying reasons and potential implications for the company's financial health.