Perdoceo Education Corp (PRDO)

Perdoceo Education Corporation's liquidity ratios have shown a consistently strong trend over the past five years, as indicated by the current ratio, quick ratio, and cash ratio.

The current ratio, measuring the company's ability to meet short-term liabilities with its current assets, has steadily increased from 3.47 in 2019 to 5.90 in 2023. This suggests that the company has ample current assets to cover its short-term obligations, indicating a healthy liquidity position.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown a positive trend, increasing from 3.47 in 2019 to 5.84 in 2023. This implies that Perdoceo Education Corporation has sufficient liquid assets to cover its short-term liabilities without relying on selling inventory.

Moreover, the cash ratio, which specifically assesses the company's ability to cover immediate liabilities with cash and cash equivalents, has shown improvement over the years, rising from 2.92 in 2019 to 5.54 in 2023. This indicates that the company's cash position has strengthened, further enhancing its ability to meet short-term financial obligations.

In summary, Perdoceo Education Corporation's liquidity ratios demonstrate a robust financial position with strong liquidity levels, indicating the company's ability to efficiently manage its short-term financial obligations and potentially seize opportunities for growth and investment.

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Additional liquidity measure

The cash conversion cycle of Perdoceo Education Corporation has shown a decreasing trend over the past five years. In 2019, the company had a cash conversion cycle of 32.80 days, which decreased to 25.25 days by the end of 2020. The trend continued with further improvements to 23.56 days in 2021 and 24.16 days in 2022. By the end of 2023, the company's cash conversion cycle reduced even further to 17.45 days.

A decreasing cash conversion cycle indicates that the company is becoming more efficient in managing its working capital. This may suggest that Perdoceo Education Corporation is improving its ability to collect receivables, manage inventory, and pay creditors in a more timely manner. This trend is generally positive as it signifies better cash flow management and operational efficiency within the organization.