Maximus Inc (MMS)

Maximus Inc's liquidity ratios have shown fluctuations over the past five years. The current ratio, which measures a company's ability to cover short-term liabilities with current assets, has generally been above 1, indicating that Maximus Inc has had sufficient current assets to cover its current liabilities. However, there has been some variability in the current ratio, with a peak in 2020 at 1.66 and a slight decrease to 1.49 in 2024.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also shown fluctuations. Maximus Inc's quick ratio has generally been above 1, indicating the company's ability to meet its short-term obligations without relying on inventory. The quick ratio decreased from 1.53 in 2020 to 1.31 in 2023, before slightly increasing to 1.32 in 2024.

The cash ratio, which is the most conservative measure of liquidity that only considers cash and cash equivalents, has varied significantly for Maximus Inc. The cash ratio has generally been low, with a noticeable increase from 0.05 in 2022 to 0.23 in 2024. This suggests that Maximus Inc may have improved its ability to cover its short-term obligations with cash on hand.

Overall, Maximus Inc's liquidity ratios indicate that the company has maintained a relatively healthy liquidity position over the past five years, with some variability in the ratios. However, the increasing trend in the cash ratio from 2022 to 2024 is a positive sign, indicating potential improvements in the company's ability to meet its short-term obligations with cash resources.

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Additional liquidity measure

The cash conversion cycle for Maximus Inc has exhibited a consistent trend of improvement over the past five years. The company's cash conversion cycle decreased from 82.90 days in 2020 to 60.50 days in 2024, indicating that Maximus Inc has become more efficient in managing its working capital.

A shorter cash conversion cycle signifies that Maximus Inc is taking less time to convert its investments in inventory and accounts receivable into cash, reflecting improved liquidity and operational efficiency. This trend suggests that the company has been able to streamline its operations, manage inventory levels more effectively, and collect receivables more promptly.

Overall, the decreasing trend in the cash conversion cycle for Maximus Inc over the past five years is a positive indication of the company's ability to efficiently manage its working capital and generate cash from its operations.