Perficient Inc (PRFT)

Perficient Inc.'s liquidity ratios, including the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term financial obligations.

The current ratio for Perficient Inc. has shown a positive trend over the past five years, increasing from 1.76 in 2020 to 4.15 in 2023. This indicates that the company has significantly improved its ability to cover its current liabilities with its current assets. A current ratio above 1 suggests that the company has more than enough current assets to cover its current liabilities.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also exhibits a similar positive trend, mirroring the current ratio at 4.15 in 2023. This implies that the company has a strong ability to meet its short-term obligations without relying on inventory.

The cash ratio, which is the most conservative liquidity ratio, reveals the company's ability to cover its current liabilities with cash and cash equivalents. Perficient Inc.'s cash ratio has varied over the years, with a significant improvement from 0.31 in 2021 to 1.87 in 2023. A cash ratio above 1 indicates that the company can cover all its current liabilities with its cash and cash equivalents alone.

Overall, Perficient Inc. demonstrates strong liquidity positions based on its current ratio, quick ratio, and cash ratio. The upward trend in these ratios suggests an improvement in the company's ability to meet its short-term financial obligations effectively.

---

Additional liquidity measure

The cash conversion cycle of Perficient Inc. has exhibited some fluctuations over the past five years. In 2023, the company's cash conversion cycle was 60.20 days, showing a slight improvement from the prior year's figure of 65.50 days. This indicates that Perficient was able to convert its investments in inventory and accounts receivable into cash more efficiently in 2023.

Comparing to 2021, where the cash conversion cycle was 64.88 days, the company further reduced the time it takes to convert its resources into cash by around 4 days. This improvement suggests that Perficient managed its working capital more effectively in 2023.

Furthermore, in 2020, the company had a cash conversion cycle of 54.80 days, which was lower than the subsequent years. This implies that Perficient was exceptionally efficient in managing its cash, inventory, and receivables in 2020. However, slight deteriorations were observed in 2021 and 2022 before improving again in 2023.

Despite the fluctuations observed in the cash conversion cycle over the past five years, Perficient Inc. generally seems to have made efforts to enhance its working capital management, which is crucial for the company's liquidity and overall financial health.