Insperity Inc (NSP)

Insperity Inc's liquidity ratios indicate its ability to meet short-term obligations and cover immediate financial needs.

- The current ratio has been relatively stable over the past five years, ranging from 1.08 to 1.19. This suggests that the company has sufficient current assets to cover its current liabilities, with a slight decrease noted from 2020 to 2024.

- The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also shows a decreasing trend over the years, from 1.14 in 2020 to 1.04 in 2024. This indicates the company's ability to meet short-term obligations without relying on selling inventory has slightly weakened.

- The cash ratio, which is the most conservative measure of liquidity, has shown a gradual decline from 0.70 in 2020 to 0.61 in 2024. This trend suggests that the proportion of the company's most liquid assets (cash and equivalents) relative to its current liabilities has decreased slightly over the years.

Overall, while Insperity Inc's liquidity ratios have remained above the industry average, the declining trend in these ratios over the years may indicate a need for the company to closely monitor and manage its short-term liquidity position to ensure continued financial stability.

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Additional liquidity measure

Insperity Inc's cash conversion cycle has shown a decreasing trend over the years, indicating an improvement in the company's efficiency in managing its working capital. As of December 31, 2020, the cash conversion cycle stood at 124.38 days, but by December 31, 2024, it had decreased significantly to 35.64 days.

This reduction in the cash conversion cycle suggests that the company has been able to shorten the time it takes to convert its investments in inventory and accounts receivable into cash. A lower cash conversion cycle typically reflects more effective inventory management, quicker collection of receivables, and better management of payables.

Insperity Inc's decreasing cash conversion cycle is a positive indication of its operational efficiency and liquidity management, as it implies that the company has been able to generate cash more quickly from its core operations over the years. This trend may contribute to improved cash flows and overall financial performance.