NV5 Global Inc (NVEE)

The liquidity ratios of NV5 Global Inc have shown some fluctuations over the past five years.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has ranged from 1.81 to 2.20 during this period. A current ratio above 1 indicates that the company has more current assets than current liabilities, with a higher ratio implying a stronger liquidity position. NV5 Global Inc's current ratio has generally remained above 2, indicating a healthy level of liquidity.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. NV5 Global Inc's quick ratio has ranged from 1.14 to 1.52 over the past five years. A quick ratio above 1 signifies that the company can meet its short-term obligations without relying on the sale of inventory, with a higher ratio indicating a stronger liquidity position. NV5 Global Inc's quick ratio has generally remained above 1, reinforcing its ability to cover short-term liabilities.

The cash ratio, which is the most conservative measure of liquidity, focuses solely on cash and cash equivalents as a percentage of current liabilities. NV5 Global Inc's cash ratio has fluctuated between 0.24 and 0.48 over the past five years. A cash ratio above 1 implies that the company can cover its current liabilities solely with cash on hand, with a higher ratio indicating a stronger liquidity position. Despite some variability, NV5 Global Inc's cash ratio has generally remained below 1, suggesting that the company may need to rely on sources other than cash on hand to meet short-term obligations.

Overall, NV5 Global Inc's liquidity ratios reflect a generally stable and healthy liquidity position over the past five years, with the company maintaining sufficient current assets to cover its short-term liabilities.

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Additional liquidity measure

The cash conversion cycle of NV5 Global Inc has shown a decreasing trend over the past five years, indicating improvements in managing its working capital efficiently. The company took 17.82 days to convert its investments in inventory and other resources into cash during the most recent reporting period, compared to 16.95 days in the previous year and a significant reduction from 67.36 days five years ago.

A shorter cash conversion cycle suggests that NV5 Global Inc has been able to optimize its operations, efficiently manage its inventory levels, collect receivables promptly, and pay suppliers within a reasonable timeframe. This trend indicates that the company has been more effective in generating cash flow from its core business activities, which can contribute to its liquidity and overall financial health.

Overall, the decreasing trend in NV5 Global Inc's cash conversion cycle reflects a positive aspect of its working capital management, potentially enhancing its financial performance and stability.