F5 Networks Inc (FFIV)
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 | 1.29 | 1.26 | 1.15 | 1.20 | 1.12 | 1.04 | 0.95 | 0.98 | 1.18 | 1.16 | 1.08 | 1.01 | 1.54 | 1.39 | 1.32 | 1.13 | 1.51 | 1.37 | 1.40 | 1.68 |
| Quick ratio | 0.88 | 0.85 | 0.76 | 0.81 | 0.75 | 0.74 | 0.68 | 0.73 | 0.89 | 0.90 | 0.85 | 0.77 | 1.30 | 1.17 | 1.11 | 0.93 | 1.32 | 1.17 | 1.22 | 1.52 |
| Cash ratio | 0.54 | 0.55 | 0.46 | 0.50 | 0.43 | 0.48 | 0.42 | 0.50 | 0.60 | 0.65 | 0.57 | 0.48 | 1.04 | 0.94 | 0.87 | 0.66 | 1.01 | 0.88 | 0.92 | 1.22 |
The current ratio, quick ratio, and cash ratio are important liquidity ratios that provide insight into F5 Inc's ability to meet its short-term obligations.
The current ratio measures the company's ability to cover its current liabilities with its current assets. F5 Inc's current ratio has shown a general increasing trend over the past quarters, from 1.12 in Q1 2023 to 1.29 in Q1 2024. This indicates that the company's liquidity position has strengthened, with more current assets available to cover its short-term liabilities.
The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. F5 Inc's quick ratio has also been on the rise, improving from 1.08 in Q1 2023 to 1.26 in Q1 2024. This suggests that the company has a sufficient level of liquid assets to cover its immediate liabilities without relying on inventory.
The cash ratio, which is the most stringent measure of liquidity, focuses solely on cash and cash equivalents as a percentage of current liabilities. F5 Inc's cash ratio has increased steadily from 0.67 in Q2 2022 to 0.93 in Q1 2024. This shows that the company has been building up its cash reserves relative to its short-term obligations, indicating a stronger liquidity position.
Overall, the improving trends in all three liquidity ratios suggest that F5 Inc has been managing its short-term liquidity effectively, which bodes well for its ability to meet its financial obligations in the near term.
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 | 61.50 | 53.17 | 52.88 | 59.40 | 62.22 | 53.92 | 55.50 | 47.96 | 49.45 | 39.28 | 49.18 | 48.79 | 45.14 | 37.08 | 41.47 | 47.14 | 51.62 | 44.59 | 47.12 | 43.02 |
The cash conversion cycle is a crucial metric that measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that the company is able to efficiently manage its working capital and generate cash.
Analyzing the data provided for F5 Inc, we observe fluctuations in the cash conversion cycle over the past quarters. In Q1 2024, the company's cash conversion cycle was 51.37 days, showing an increase from the previous quarter's 42.13 days in Q4 2023. This suggests a potential slowdown in converting investments into cash.
Looking further back, we see a declining trend in the cash conversion cycle from Q1 2023 to Q4 2023, indicating improvements in working capital management and operational efficiency. However, in Q1 2023, the cycle was relatively extended at 57.19 days, implying inefficiencies in the company's cash conversion process.
Comparing the recent data to prior quarters, we can see that the company has experienced fluctuations in its cash conversion cycle, highlighting the importance of monitoring working capital management practices. It would be beneficial for F5 Inc to analyze the underlying factors driving these changes and work towards maintaining a more consistent and efficient cash conversion cycle over time.