ePlus inc (PLUS)

The liquidity ratios of ePlus inc over the past five years indicate a generally stable and healthy liquidity position. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has been consistently above 1, signaling a strong ability to cover its short-term liabilities. The ratio has shown a slight improvement over the years, reaching 1.94 in 2024 from 1.68 in 2020.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has shown some fluctuation but has generally remained above 1, indicating that the company can meet its short-term obligations without relying on inventory. The quick ratio increased to 1.37 in 2024 from 1.19 in 2020, showing an improvement in the company's ability to quickly cover its liabilities with its most liquid assets.

The cash ratio, which specifically assesses the company's ability to cover its current liabilities with its cash and cash equivalents, has also shown improvement over the years. The ratio increased to 0.39 in 2024 from 0.22 in 2020, suggesting that ePlus inc has a stronger ability to meet its short-term obligations using its cash reserves.

Overall, the liquidity ratios of ePlus inc indicate a solid financial position with improved liquidity year over year, which is a positive indicator of the company's ability to manage its short-term financial obligations effectively.

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Additional liquidity measure

The cash conversion cycle of ePlus Inc has fluctuated over the past five years. In the most recent fiscal year ending March 31, 2024, the company's cash conversion cycle improved to 67.37 days from 94.43 days in the previous year. This indicates that the company is managing its working capital more efficiently.

Looking back, in fiscal year 2023, the cash conversion cycle was longer at 94.43 days compared to 91.34 days in fiscal year 2022. This suggests that the company took longer to convert its investments in inventory and accounts receivable into cash during that period.

In contrast, in fiscal year 2021, the cash conversion cycle was shorter at 61.55 days, showing improved efficiency in managing working capital compared to fiscal year 2020 when the cycle was 76.22 days.

Overall, the trend in ePlus Inc's cash conversion cycle indicates some variations in the efficiency of the company's working capital management over the past five years. It is important for the company to focus on maintaining a shorter cash conversion cycle to optimize its cash flow and financial performance.