Progyny Inc (PGNY)

The liquidity ratios of Progyny Inc show a consistently strong liquidity position over the years based on the current ratio, quick ratio, and cash ratio.

1. Current Ratio: Progyny Inc's current ratio has been increasing steadily from 2.45 in 2020 to 2.80 in 2024. This indicates that the company's current assets are 2.45 times (in 2020) to 2.80 times (in 2024) its current liabilities, providing a comfortable cushion to cover its short-term obligations. The ratio peaked in 2023 at 3.44, suggesting a significant increase in liquidity that year.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, shows a similar trend to the current ratio with an even higher level of liquidity. Progyny's quick ratio has increased from 2.59 in 2020 to 3.03 in 2024. This implies that the company's quick assets (e.g., cash, marketable securities) are more than sufficient to cover its current liabilities without relying on inventory or prepaid expenses.

3. Cash Ratio: The cash ratio, which is the most conservative liquidity measure, indicates the company's ability to cover its short-term obligations with cash and cash equivalents alone. Progyny Inc's cash ratio ranged from 1.19 to 2.00 over the years, with the highest level recorded in 2023. This suggests that the company has ample cash reserves to meet its immediate financial commitments.

Overall, the liquidity ratios of Progyny Inc demonstrate a healthy financial position with increasing levels of liquidity, indicating the company's ability to meet its short-term obligations comfortably and potentially take advantage of unforeseen opportunities or weather financial challenges.

---

Additional liquidity measure

The cash conversion cycle for Progyny Inc has shown variability over the years. In December 2020, the cash conversion cycle was 50.38 days, indicating that the company took approximately 50 days to convert its investments in inventory and other resources back into cash. This metric increased in December 2021 to 67.48 days, suggesting a lengthened period for the conversion process.

By December 2022, the cash conversion cycle extended further to 78.91 days, signifying a potential slow-down in the company's cash flow cycle. However, Progyny managed to improve its efficiency by December 2023, with the cycle decreasing to 51.33 days.

In the most recent period of December 2024, the cash conversion cycle slightly increased to 56.83 days, indicating that the company may have experienced some challenges in managing its working capital efficiently. Overall, monitoring the cash conversion cycle can provide insights into Progyny's operational efficiency and liquidity management over time.