Paycom Soft (PAYC)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.10 | 1.11 | 1.16 | 1.13 | 1.09 |
| Quick ratio | 0.10 | 0.12 | 0.17 | 0.14 | 0.09 |
| Cash ratio | 0.10 | 0.12 | 0.17 | 0.14 | 0.09 |
Paycom Soft's liquidity ratios have shown slight improvements over the years.
The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has increased gradually from 1.09 in 2020 to 1.10 in 2024. This indicates that Paycom Soft has a sufficient level of current assets to meet its short-term obligations.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Paycom Soft's quick ratio has improved from 0.09 in 2020 to 0.10 in 2024, showing the company's ability to meet its short-term liabilities with its most liquid assets.
Additionally, the cash ratio, which focuses solely on the company's ability to cover short-term liabilities with its cash and cash equivalents, has remained relatively stable at 0.14 in 2021 and 0.10 in 2024. This indicates that Paycom Soft has a moderate level of cash reserves to meet its short-term obligations.
Overall, Paycom Soft's liquidity ratios suggest that the company has been managing its short-term liquidity effectively, with a slight improvement in its ability to meet obligations over the years.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 1.53 | 1.83 | 2.76 | 2.55 | 3.40 |
The cash conversion cycle of Paycom Soft has shown a consistent improvement over the years. As of December 31, 2020, the company had a cash conversion cycle of 3.40 days, which decreased to 2.55 days by December 31, 2021. This trend continued with further reductions to 2.76 days by December 31, 2022, 1.83 days by December 31, 2023, and 1.53 days by December 31, 2024.
A decreasing cash conversion cycle indicates that Paycom Soft is managing its working capital more efficiently, potentially converting its inventory and receivables into cash more quickly. This improved efficiency could result in better cash flow and liquidity for the company, allowing it to fund its operations and investments more effectively. Overall, the decreasing trend in the cash conversion cycle reflects positively on the financial management and operational performance of Paycom Soft.