Liquidity Services Inc (LQDT)
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 | 1.21 | 1.12 | 1.05 | 1.08 | 1.05 | 0.95 | 0.85 | 0.96 | 1.21 | 1.27 | 1.17 | 1.31 | 1.27 | 1.18 | 1.16 | 1.23 | 1.31 | 1.35 | 1.47 |
| Quick ratio | 1.07 | 1.04 | 0.93 | 0.86 | 0.83 | 0.89 | 0.76 | 0.69 | 0.79 | 1.03 | 1.07 | 0.95 | 1.07 | 1.09 | 0.97 | 0.88 | 0.96 | 1.06 | 1.07 | 1.10 |
| Cash ratio | 1.00 | 0.98 | 0.88 | 0.82 | 0.76 | 0.79 | 0.70 | 0.64 | 0.73 | 0.97 | 1.02 | 0.89 | 1.01 | 1.02 | 0.91 | 0.79 | 0.86 | 0.97 | 0.98 | 1.00 |
Liquidity Services Inc's liquidity ratios have shown fluctuations over the past eight quarters. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has been generally improving, reaching 1.29 in Q1 2024 from a low of 0.85 in Q2 2022. This indicates that the company has been better positioned to meet its short-term obligations.
The quick ratio, also known as the acid-test ratio, reflects the company's ability to meet short-term liabilities with its most liquid assets. Liquidity Services Inc's quick ratio has shown a similar trend to the current ratio, steadily increasing to 1.15 in Q1 2024 from 0.75 in Q2 2022, suggesting an improved liquidity position.
The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, has also been on an upward trajectory, reaching 1.08 in Q1 2024 from 0.70 in Q2 2022. This indicates that the company's cash reserves have been growing relative to its short-term obligations.
Overall, Liquidity Services Inc's liquidity ratios have been moving in a positive direction over the past eight quarters, which suggests that the company has been improving its ability to meet its short-term financial commitments. However, investors and analysts should continue to monitor these ratios to ensure the company maintains a healthy liquidity position.
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 | -20.07 | -36.64 | -45.92 | -40.70 | -17.77 | -41.41 | -52.32 | -45.23 | -26.71 | -50.24 | -48.41 | -45.53 | -26.81 | -27.34 | -37.67 | -12.08 | 0.26 | -15.70 | -26.50 | 36.35 |
The cash conversion cycle of Liquidity Services Inc has been displaying fluctuations over the past several quarters. In Q1 2024, the company's cash conversion cycle improved significantly to -37.03 days, indicating that it took less time to convert its investments in inventory back into cash. This improvement compared to the previous quarter (Q4 2023) when the cycle was -62.70 days. The trend of a decreasing cash conversion cycle reflects a more efficient management of working capital and faster turnover of assets.
Looking further back, in Q3 2023, the cash conversion cycle was -75.58 days, showing a pronounced decrease from Q2 2023 at -67.51 days. This reduction in the cycle suggests that the company was able to enhance its liquidity position and operational efficiency by managing its inventory and accounts receivable more effectively. Similarly, in Q1 2023, the cycle was observed at -34.84 days, indicating a shorter time to convert inventory to cash relative to the previous quarter.
Contrastingly, in Q4 2022, the cash conversion cycle was at a higher level of -77.26 days, which represents a longer time for the company to complete the cash cycle compared to Q3 2022 (-92.73 days) and Q2 2022 (-79.60 days). This elongation of the cycle may indicate potential inefficiencies in managing inventory, accounts receivable, and accounts payable during that quarter.
Overall, the company has experienced variations in its cash conversion cycle over the analyzed periods, demonstrating fluctuations in efficiency in converting investments into cash. The recent improvement in the cycle suggests better management of working capital, which can positively impact the company's financial health and operational performance.