Stride Inc (LRN)

The liquidity ratios of Stride Inc have shown a positive trend over the past five years, indicating an improvement in the company's short-term financial health and ability to meet its current obligations.

- The current ratio has increased steadily from 1.83 in 2020 to 5.10 in 2024. This signifies that the company's current assets are more than five times its current liabilities in the most recent year, providing a comfortable cushion for meeting short-term liabilities.

- The quick ratio, also known as the acid-test ratio, has also improved, rising from 1.70 in 2020 to 5.63 in 2024. This metric excludes inventory from current assets, focusing on the most liquid assets like cash and accounts receivable. The significant increase in the quick ratio indicates a strong capability to meet short-term obligations without relying on inventory sales.

- The cash ratio, which measures the company's ability to cover current liabilities with its cash and cash equivalents, has more than quadrupled from 0.78 in 2020 to 3.62 in 2024. This shows a substantial enhancement in the company's cash position relative to its short-term liabilities.

Overall, the consistently improving liquidity ratios of Stride Inc suggest that the company has become more adept at managing its short-term liquidity and is in a stronger position to meet its financial obligations as they come due.

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Additional liquidity measure

The cash conversion cycle for Stride Inc has shown some fluctuation over the past five years. In the latest financial year ending on June 30, 2024, the company's cash conversion cycle decreased to 87.42 days compared to 93.77 days in the previous year. This suggests that the company improved its efficiency in managing cash flows, which is a positive sign.

Looking further back, the trend indicates that the cash conversion cycle was relatively stable between 2021 and 2023, hovering around 88 days. However, there was a notable uptick in the cycle during the year ended June 30, 2023. This increase in the cash conversion cycle may have been influenced by factors such as extended payment terms from customers or delays in converting inventory into sales.

On the whole, while there have been fluctuations in the cash conversion cycle of Stride Inc over the years, the recent improvement is indicative of better cash flow management. It is essential for the company to continue monitoring and optimizing its cash conversion cycle to ensure efficient operations and maximize working capital efficiency.