Premier Inc (PINC)

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 1.00 0.93 1.43 1.30 0.79 0.72 0.72 0.88 0.86 0.88 1.01 1.10 1.09 1.04 1.12 1.07 1.25 1.10 1.28 1.40
Quick ratio 0.34 0.25 0.71 0.72 0.25 0.23 0.23 0.34 0.27 0.35 0.31 0.67 0.59 0.56 0.60 0.38 0.47 0.56 0.62 0.69
Cash ratio 0.17 0.09 0.53 0.59 0.11 0.10 0.10 0.21 0.11 0.21 0.12 0.49 0.39 0.34 0.36 0.18 0.20 0.35 0.25 0.31

Premier Inc's liquidity ratios have shown fluctuating trends over the past few quarters. The current ratio, which measures the company's ability to cover its short-term obligations with current assets, has varied widely, ranging from a low of 0.72 to a high of 1.43. The current ratio was below 1 in some quarters, indicating potential difficulty in meeting short-term liabilities.

The quick ratio, a more stringent measure of liquidity, considers only the most liquid assets to cover short-term liabilities. Premier Inc's quick ratio has also been unstable, with values fluctuating from as low as 0.23 to as high as 0.72. The consistently low quick ratios suggest that the company may have difficulty meeting its current obligations without relying on inventory.

The cash ratio, which is the most conservative measure of liquidity, focuses solely on the availability of cash and cash equivalents to cover short-term liabilities. Premier Inc's cash ratio has also shown volatility, ranging from 0.09 to 0.59. The lower cash ratios indicate that the company may not have sufficient readily available cash to meet its short-term obligations comfortably.

Overall, Premier Inc's liquidity ratios demonstrate inconsistent performance, with some periods indicating potential liquidity challenges. It is important for the company to closely monitor and manage its liquidity position to ensure it can meet its short-term financial commitments effectively.

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 49.83 41.54 49.54 45.64 50.22 64.81 74.16 73.97 79.05 69.46 64.54 61.98 67.56 103.42 92.50 91.28 51.56 27.31 48.62 41.88

The cash conversion cycle of Premier Inc has shown variability over the past few quarters. The cash conversion cycle measures how long it takes for the company to convert its investments in inventory and other resources into cash flow from sales.

Looking at the trend:
- The cash conversion cycle was relatively stable around 40-50 days from December 2019 to March 2020.
- There was a significant decrease in the cash conversion cycle to 27.31 days in September 2020, indicating improved efficiency in managing inventory and collecting receivables.
- However, this trend reversed in the subsequent quarters, with the cycle increasing to over 90 days in the first half of 2021, peaking at 103.42 days in March 2021.
- There was a significant improvement in the cash conversion cycle in the latter half of 2021, with a decrease to around 60 days by the end of the year.
- The trend was somewhat mixed in 2022 and 2023, with the cycle fluctuating between 60-80 days.

Overall, Premier Inc should focus on strategies to improve its cash conversion cycle consistently over time to enhance liquidity and operational efficiency. This could involve optimizing inventory management, streamlining accounts receivable processes, and negotiating favorable payment terms with suppliers.