Manhattan Associates Inc (MANH)

Manhattan Associates Inc's liquidity ratios have shown a slight decline over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, decreased from 1.70 in 2020 to 1.26 in 2024. This indicates a potential weakening of the company's short-term liquidity position.

Similarly, the quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, also decreased from 1.60 in 2020 to 1.19 in 2024. This decline suggests that Manhattan Associates Inc may have a reduced ability to meet its short-term obligations without relying on inventory.

Lastly, the cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, decreased from 1.04 in 2020 to 0.67 in 2024. This downward trend indicates a decrease in Manhattan Associates Inc's immediate cash liquidity, which could potentially impact its ability to handle unexpected financial obligations.

Overall, the decreasing trend in Manhattan Associates Inc's liquidity ratios suggests a potential need for the company to carefully manage its cash flow and monitor its short-term financial obligations to maintain a healthy liquidity position.

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Additional liquidity measure

The cash conversion cycle for Manhattan Associates Inc has shown some fluctuation over the past five years. In December 31, 2020, the cash conversion cycle was at 52.49 days, indicating that on average, it took the company 52.49 days to convert its investments in inventory and other resources into cash from sales.

Over the subsequent years, there was a slight increase in the cash conversion cycle, reaching 53.21 days by December 31, 2021. This increase may suggest a lengthening of the time it takes for the company to turn its investments into cash.

By December 31, 2022, the cash conversion cycle further extended to 60.76 days, reaching its peak in the timeframe provided. This increase could be attributed to factors such as inefficiencies in inventory management, longer accounts receivable collection periods, or delays in paying accounts payable.

In December 31, 2023, there was a slight improvement as the cash conversion cycle decreased to 56.33 days. This reduction may indicate some improvements in the company's working capital management or operational efficiency.

However, by December 31, 2024, the cash conversion cycle rose again to 58.20 days. Even though it was lower than the peak in 2022, it was still higher than the levels in 2020 and 2021, suggesting that Manhattan Associates Inc may still be facing challenges in optimizing its cash flow conversion process.

Overall, the fluctuation in the cash conversion cycle over the years indicates the company's varying effectiveness in managing its working capital components efficiently. Monitoring and managing this cycle is critical for Manhattan Associates Inc to improve its liquidity, profitability, and overall financial performance.