Insperity Inc (NSP)

Quick ratio

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash US$ in thousands 1,039,000 470,000 676,000 667,000 693,000 679,000 580,000 697,000 733,000 562,143 510,869 576,654 575,812 467,921 455,387 494,777 554,846 372,356 459,399 404,728
Short-term investments US$ in thousands 133,000 126,000 174,000 134,000 135,000 116,670 135,260 91,081 90,031 77,982 75,710 45,676 120,742 82,610 82,584 82,570 82,521 72,861 75,230 39,002
Receivables US$ in thousands 829,000 — — — 694,000 — 11,588 607,313 622,764 558,700 685,857 670,223 513,306 579,503 595,836 561,244 392,746 528,712 473,935 520,745
Total current liabilities US$ in thousands 1,930,000 1,233,000 1,383,000 1,406,000 1,436,000 1,321,360 1,135,680 1,302,960 1,353,370 1,121,250 1,246,600 1,286,600 1,128,570 1,004,180 1,002,690 1,044,350 904,924 841,070 840,563 888,458
Quick ratio 1.04 0.48 0.61 0.57 1.06 0.60 0.64 1.07 1.07 1.07 1.02 1.00 1.07 1.13 1.13 1.09 1.14 1.16 1.20 1.09

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,039,000K + $133,000K + $829,000K) ÷ $1,930,000K
= 1.04

The quick ratio reflects Insperity Inc's ability to meet its short-term obligations using its most liquid assets. The quick ratio has fluctuated over time, starting at a robust 1.09 on March 31, 2020, and remaining above 1 for most periods until March 31, 2022. This indicates a strong ability to cover short-term liabilities without relying heavily on inventory.

However, the quick ratio declined significantly to 0.64 on June 30, 2023, and even further to 0.48 on September 30, 2024, suggesting potential liquidity challenges. This could be due to a decrease in liquid assets relative to current liabilities during these periods.

While there was a slight improvement to 1.04 on December 31, 2024, the quick ratio remains below 1, indicating a potential liquidity risk. Investors and creditors may view a quick ratio below 1 as a red flag, signaling that the company may struggle to meet its short-term obligations without relying on selling inventory.

Insperity Inc may need to closely monitor its liquidity position to ensure it can meet its short-term financial commitments effectively. Management may consider implementing strategies to improve liquidity, such as increasing cash reserves or reducing short-term liabilities.