Deluxe Corporation (DLX)
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 | 0.93 | 0.91 | 0.96 | 0.96 | 0.94 | 0.94 | 0.95 | 0.92 | 0.91 | 1.05 | 1.14 | 1.25 | 1.23 | 1.79 | 2.00 | 1.91 | 1.16 | 1.18 | 1.27 | 1.21 |
| Quick ratio | 0.38 | 0.53 | 0.55 | 0.54 | 0.40 | 0.51 | 0.53 | 0.78 | 0.42 | 0.60 | 0.70 | 0.71 | 0.86 | 1.30 | 1.43 | 1.31 | 0.58 | 0.60 | 0.63 | 0.61 |
| Cash ratio | 0.09 | 0.09 | 0.08 | 0.06 | 0.06 | 0.09 | 0.09 | 0.36 | 0.06 | 0.22 | 0.31 | 0.31 | 0.41 | 0.94 | 1.04 | 0.86 | 0.18 | 0.20 | 0.19 | 0.17 |
Deluxe Corp.'s liquidity ratios indicate its ability to meet short-term financial obligations. The current ratio has been relatively stable around 0.90, meaning its current assets are only able to cover a portion of its current liabilities. This suggests potential liquidity challenges in meeting short-term obligations.
The quick ratio, a more stringent measure of liquidity excluding inventory from current assets, has also been consistently below 1. This further highlights Deluxe Corp.'s reliance on inventory to meet short-term obligations, signaling potential difficulties if inventory cannot be converted to cash quickly.
The cash ratio, the most conservative liquidity measure, shows the company's ability to cover current liabilities with cash and cash equivalents alone. While this ratio has fluctuated, it has generally remained at low levels, indicating limited cash reserves to cover short-term obligations.
Overall, Deluxe Corp.'s liquidity ratios suggest a potential vulnerability in meeting short-term obligations. Management may need to closely monitor cash flow and working capital management to ensure liquidity adequacy and mitigate financial risks.
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 | -0.74 | 3.10 | 1.71 | 8.65 | 3.96 | 3.57 | -0.34 | -2.47 | -4.24 | -6.36 | -9.07 | -3.56 | -0.62 | -3.47 | 0.35 | -0.35 | -2.76 | 1.30 | 5.64 | 7.30 |
The cash conversion cycle of Deluxe Corp. fluctuated over the past eight quarters. In Q4 2023 and Q3 2023, the company's cash conversion cycle was negative, indicating efficient management of cash flows. However, in Q2 2023 and Q1 2023, the cash conversion cycle turned positive, suggesting an increase in the time it takes the company to convert its investments in inventory and other resources into cash receipts from customers.
The most notable improvement in cash conversion cycle occurred in Q2 2022, where the cycle was significantly negative, indicating effective management of working capital and quick conversion of resources into cash. However, in Q1 2022, the company experienced a negative cash conversion cycle, indicating a shorter time period for the cash to flow through the business operations.
Overall, the historical trend of Deluxe Corp.'s cash conversion cycle reflects fluctuations in the efficiency of managing working capital and cash flow. The company should continue to closely monitor and optimize its cash conversion cycle to ensure effective management of liquidity and operational efficiency.