Mesa Laboratories Inc (MLAB)

Mesa Laboratories Inc's liquidity ratios, as indicated by the current ratio, have depicted a declining trend over the period from March 31, 2021, to March 31, 2024. The current ratio stood at a robust 9.30 in 2021, suggesting a strong ability to cover short-term obligations with current assets. However, this ratio decreased to 2.47 by March 31, 2024, indicating a reduction in liquidity and a potential strain on meeting current liabilities.

Similarly, Mesa Laboratories' quick ratio showed a decreasing trend over the same period. The quick ratio, which provides a more stringent measure of liquidity by excluding inventories from current assets, declined from 8.83 in 2021 to 1.52 in 2024. This downward trend signals a decreasing ability to meet short-term obligations with liquid assets alone.

Furthermore, the cash ratio, which specifically measures the ability to cover current liabilities with cash and cash equivalents, also exhibited a decline from 8.10 in 2021 to 0.64 in 2024. This reduction indicates a decreasing reliance on cash reserves to meet immediate payment obligations.

Overall, Mesa Laboratories Inc's liquidity ratios show a decreasing trend, which may raise concerns about the company's ability to comfortably meet short-term financial obligations. It is essential for the company to closely monitor and potentially improve its liquidity position to ensure financial stability and operational efficiency in the future.

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Additional liquidity measure

The cash conversion cycle of Mesa Laboratories Inc has shown fluctuations over the years. As of March 31, 2021, the company had a cash conversion cycle of 116.98 days, indicating a relatively efficient management of working capital. However, this cycle increased significantly to 162.68 days by March 31, 2022, reflecting potential challenges in converting inventory into cash.

By March 31, 2023, Mesa Laboratories Inc experienced a further extension in its cash conversion cycle to 192.75 days, suggesting a prolonged period between investing in inventory and receiving cash from sales. Despite a slight decrease to 183.15 days by March 31, 2024, the cycle remained on the higher end, indicating ongoing liquidity management concerns.

Interestingly, by March 31, 2025, Mesa Laboratories Inc reported a cash conversion cycle of 0.00 days, which could signify a sudden improvement in working capital management efficiency or potential data reporting anomalies. Overall, the company's cash conversion cycle trend highlights the importance of monitoring working capital dynamics to ensure optimal liquidity and operational performance.