Deluxe Corporation (DLX)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 0.05 0.92 0.97 0.97 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
Quick ratio 0.05 0.10 0.18 0.30 0.09 0.09 0.08 0.06 0.06 0.09 0.09 0.10 0.08 0.25 0.36 0.31 0.41 0.94 1.04 0.86
Cash ratio 0.05 0.10 0.18 0.30 0.09 0.09 0.08 0.06 0.06 0.09 0.09 0.10 0.08 0.25 0.36 0.31 0.41 0.94 1.04 0.86

Based on the data provided for Deluxe Corporation, let's analyze the liquidity ratios:

1. Current Ratio: The current ratio indicates the ability of a company to meet its short-term obligations with its short-term assets. From March 31, 2020, to December 31, 2024, the current ratio fluctuated significantly, starting at a healthy level of 1.91 in March 2020 but declining to as low as 0.05 by December 2024. The current ratio dropped below 1, which may raise concerns about Deluxe Corporation's short-term liquidity and ability to cover its current liabilities with its current assets.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current liabilities without relying on the sale of inventory. The quick ratio for Deluxe Corporation also had fluctuations over time, showing a decreasing trend from June 30, 2020, to December 31, 2024. In December 2024, the quick ratio dropped significantly to 0.05, indicating a potential liquidity issue as the company may struggle to meet its short-term obligations using its most liquid assets.

3. Cash Ratio: The cash ratio focuses specifically on a company's ability to cover its short-term liabilities with its cash and cash equivalents. The cash ratio for Deluxe Corporation followed a similar pattern to the quick ratio, showing a decline over the years. By December 31, 2024, the cash ratio was at a low level of 0.05, suggesting that Deluxe Corporation may have limited cash reserves to cover its short-term obligations.

Overall, the liquidity ratios for Deluxe Corporation indicate a concerning trend of decreasing liquidity over the years, leading to potential challenges in meeting its short-term financial obligations. Investors and stakeholders should closely monitor the company's liquidity position and management's strategies to address any liquidity issues that may arise.


Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 13.36 14.45 13.76 13.71 14.92 17.32 19.28 19.04 18.48 16.12 13.52 13.20 14.42 15.71 16.16 19.16 20.04 24.45 22.15 18.92

The cash conversion cycle of Deluxe Corporation has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Over the period analyzed, the cash conversion cycle decreased from 18.92 days on March 31, 2020, to 13.36 days on December 31, 2024, indicating an improvement in the company's efficiency in managing its working capital and achieving cash inflows from its operations.

There were fluctuations observed within the time span, with the cycle reaching its lowest point of 13.20 days on March 31, 2022, before slightly increasing in subsequent periods. This variation may reflect changes in the speed of inventory turnover, collection of receivables, and payment of payables within the company's operating cycle.

Overall, the decreasing trend in the cash conversion cycle suggests that Deluxe Corporation has been able to optimize its working capital management, streamline its operational processes, and enhance its cash flow generation efficiency over the analyzed period. This improvement may indicate effective inventory management, prompt collection of receivables, and efficient payment of payables, contributing to the company's financial health and operational performance.