Liquidity Services Inc (LQDT)

Cash ratio

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cash and cash equivalents	US$ in thousands	153,226	110,281	96,122	106,335	76,036
Short-term investments	US$ in thousands	2,310	7,891	1,819	0	0
Total current liabilities	US$ in thousands	155,153	120,718	123,503	109,173	74,324
Cash ratio		1.00	0.98	0.79	0.97	1.02

September 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($153,226K + $2,310K) ÷ $155,153K
= 1.00

The cash ratio of Liquidity Services Inc has fluctuated over the past five years, ranging from 0.79 to 1.02. The cash ratio indicates the firm's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio suggests a higher level of liquidity and a better ability to meet its short-term obligations.

In 2020 and 2024, Liquidity Services Inc had a cash ratio of 1.02, indicating that the company had enough cash to cover all its current liabilities. However, in 2022, the cash ratio dropped to 0.79, which may suggest a temporary liquidity crunch or a relatively lower level of cash reserves compared to its short-term liabilities.

Overall, while the cash ratio has shown some fluctuations, Liquidity Services Inc has generally maintained a healthy level of liquidity, which is essential for ensuring the company's financial stability and ability to meet its short-term obligations. It is important for the company to continue monitoring and managing its cash levels effectively to ensure ongoing liquidity.