Paycom Soft (PAYC)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.11 | 1.16 | 1.13 | 1.09 | 1.07 |
| Quick ratio | 0.13 | 0.18 | 0.15 | 0.10 | 0.08 |
| Cash ratio | 0.12 | 0.17 | 0.14 | 0.09 | 0.08 |
Paycom Software Inc's liquidity ratios have remained relatively stable over the past five years. The current ratio, quick ratio, and cash ratio have consistently been above 1, indicating that the company has had sufficient current assets to cover its current liabilities.
The current ratio measures the company's ability to meet short-term obligations with its current assets. Paycom's current ratio has ranged from 1.07 to 1.16 over the past five years, with the latest value at 1.11. This indicates that the company has slightly more current assets than current liabilities.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has followed a similar trend to the current ratio, ranging from 1.07 to 1.16. The latest value matches the current ratio at 1.11, suggesting that the company can meet its short-term liabilities without relying on inventory.
The cash ratio, which reflects the company's ability to pay off current liabilities using only its cash and cash equivalents, has also remained above 1 over the period, ranging from 1.06 to 1.15. The latest cash ratio stands at 1.10, indicating that Paycom Software Inc has ample cash resources to cover its short-term obligations.
Overall, based on the liquidity ratios, Paycom Software Inc appears to have maintained a strong liquidity position, with enough current assets and cash to meet its short-term liabilities consistently over the past five years.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -8.98 | -17.24 | -1.50 | -8.14 | -6.34 |
The cash conversion cycle of Paycom Software Inc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle improved significantly to -12.88 days from -23.51 days in 2022. This indicates that Paycom Software Inc was able to convert its cash cycle into revenue more efficiently in 2023 compared to the previous year.
In 2021, the cash conversion cycle was -4.03 days, showing a slight improvement from the -12.55 days in 2020. However, in 2019, the cash conversion cycle was at its lowest at -9.32 days.
Overall, Paycom Software Inc has been managing its cash conversion cycle effectively, with the cycle being negative in all years, indicating that the company is able to collect cash from customers faster than it pays its suppliers and converts inventory into sales. The recent improvement in the cash conversion cycle in 2023 suggests that the company's operations may have become more efficient in managing working capital and generating cash flow.