Doximity Inc (DOCS)
Liquidity ratios
| 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 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 6.20 | 8.03 | 7.00 | 7.46 | 6.99 | 8.49 | 7.18 | 7.24 | 8.12 | 9.36 | 8.68 | 7.89 |
| Quick ratio | 5.88 | 7.28 | 6.51 | 6.87 | 6.58 | 7.23 | 6.45 | 6.98 | 7.10 | 9.13 | 8.37 | 7.72 |
| Cash ratio | 5.18 | 6.33 | 5.71 | 6.16 | 5.80 | 6.49 | 5.76 | 6.33 | 6.36 | 8.35 | 7.77 | 7.25 |
Doximity Inc's liquidity ratios have exhibited relatively strong performance over the analyzed period. The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has consistently remained above 6, indicating a healthy liquidity position. The ratio peaked at 9.36 on March 31, 2022, reflecting a substantial buffer between current assets and liabilities.
Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also demonstrated robust liquidity levels. With values consistently above 5, the company has shown a strong ability to meet its short-term obligations without relying on selling inventory.
Moreover, the cash ratio, which provides insight into a company's ability to cover its short-term liabilities with its highly liquid assets like cash and cash equivalents, has remained above 5 throughout the analyzed period. This suggests that Doximity Inc possesses a solid cash position relative to its short-term liabilities, providing a cushion against unforeseen financial challenges.
Overall, based on the trend in these liquidity ratios, Doximity Inc appears to have a sound financial footing and a strong capacity to meet its short-term obligations without undue strain on its resources. However, continued monitoring of these ratios will be important to ensure the company maintains its liquidity position and can navigate any potential liquidity risks effectively.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 63.33 | 105.54 | 96.05 | 100.33 | 121.40 | 98.64 | 68.74 | 71.22 | 83.38 |
The cash conversion cycle of Doximity Inc has displayed some fluctuations over the past year. It measures the time it takes for the company to convert its investments in inventory and accounts receivable into cash flows from sales. A lower number indicates a more efficient cash management process.
The cash conversion cycle for Doximity Inc ranged from 63.33 days to 121.40 days over the past nine months. The cycle decreased in the most recent period to 63.33 days, which is a positive sign as it suggests the company is becoming more efficient in managing its working capital.
However, it's important to note that the cycle peaked at 121.40 days in the first quarter of 2023, indicating a period of less efficient cash management. This may have been influenced by factors such as increased inventory levels or slower accounts receivable turnover.
Overall, monitoring the cash conversion cycle can provide valuable insights into a company's liquidity and operational efficiency. As Doximity Inc aims to optimize its working capital management, it will be beneficial for the company to focus on maintaining a consistent and shorter cash conversion cycle to improve its cash flow and overall financial performance.