Paylocity Holdng (PCTY)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.13 | 1.13 | 1.11 | 1.12 | 1.10 | 1.06 | 1.04 | 1.03 | 1.03 | 1.02 | 1.04 | 1.02 | 1.09 | 1.07 | 1.10 | 1.16 | 1.18 | 1.09 | 1.06 | 1.09 |
| Quick ratio | 0.14 | 0.14 | 0.12 | 0.13 | 0.11 | 0.08 | 0.05 | 0.04 | 0.04 | 0.03 | 0.05 | 0.02 | 0.11 | 0.09 | 0.10 | 0.17 | 0.21 | 0.10 | 0.08 | 0.11 |
| Cash ratio | 0.13 | 0.13 | 0.11 | 0.11 | 0.10 | 0.07 | 0.04 | 0.03 | 0.03 | 0.02 | 0.04 | 0.02 | 0.11 | 0.09 | 0.10 | 0.17 | 0.20 | 0.10 | 0.08 | 0.11 |
Paylocity Holdng's liquidity ratios have shown fluctuations over the periods in consideration. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally remained above 1, indicating the company's ability to meet its short-term liabilities. However, there has been some variability in the current ratio, with slight increases and decreases observed over time.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also displayed fluctuations. The company's quick ratio has been consistently below 1, suggesting a potential challenge in meeting short-term obligations without relying on inventory. The quick ratio has shown a similar pattern of slight fluctuations over time.
The cash ratio, the most conservative liquidity measure that considers only cash and cash equivalents relative to current liabilities, has exhibited a pattern similar to the quick ratio. The cash ratio has been consistently below 1, indicating a limited ability to cover short-term obligations solely with cash on hand.
Overall, while the current ratio suggests that Paylocity Holdng has generally been able to meet its short-term obligations, the quick and cash ratios indicate a more constrained liquidity position. It is important for the company to closely monitor these ratios, particularly the quick and cash ratios, to ensure that it can meet its short-term liabilities effectively, especially during periods of economic uncertainty or financial stress.
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 3.29 | 4.60 | 3,057.00 | 2,482.40 | 2,687.55 | 3,439.51 | 3,493.05 | 1.12 | 1.76 | 1.35 | -4.71 | -6.48 | -3.44 | -0.26 | -1.32 | -3.22 | -0.32 | -3.69 | -5.02 | -8.62 |
The cash conversion cycle of Paylocity Holding fluctuated significantly over the periods analyzed. A shorter cash conversion cycle indicates that the company is able to efficiently convert its resources into cash, reflecting strong liquidity management and operational efficiency. Conversely, a longer cash conversion cycle may suggest potential liquidity challenges and inefficiencies in managing working capital.
On June 30, 2024, the cash conversion cycle was 3.29 days, showing an improvement from the previous quarter, indicating that the company was able to convert its investments in inventory and receivables into cash more quickly.
In contrast, on March 31, 2024, the cash conversion cycle increased to 4.60 days, potentially indicating a slowdown in the conversion of resources into cash compared to the previous quarter.
The most significant anomaly was observed on December 31, 2023, with a cash conversion cycle of 3,057.00 days, which is an exceptionally high number and could potentially be attributed to data inaccuracies or anomalies in the financial statements for that period.
Overall, it is crucial for Paylocity Holding to closely monitor and manage its cash conversion cycle, as it directly impacts the company's liquidity position and operational efficiency. Fluctuations in the cash conversion cycle should be investigated to identify underlying factors and take necessary actions to ensure optimal working capital management.