Progress Software Corporation (PRGS)

Liquidity ratios

Nov 30, 2024 Aug 31, 2024 May 31, 2024 Feb 29, 2024 Nov 30, 2023 Aug 31, 2023 May 31, 2023 Feb 28, 2023 Nov 30, 2022 Aug 31, 2022 May 31, 2022 Feb 28, 2022 Nov 30, 2021 Aug 31, 2021 May 31, 2021 Feb 28, 2021 Nov 30, 2020 Aug 31, 2020 May 31, 2020 Feb 29, 2020
Current ratio 0.81 1.23 1.12 0.95 0.94 0.93 0.87 0.87 1.34 1.30 1.25 1.21 1.05 1.87 1.77 0.90 0.91 1.41 1.29 1.19
Quick ratio 0.62 1.26 0.89 0.73 0.72 0.73 0.66 0.64 1.11 1.10 1.02 0.92 0.80 1.70 1.60 0.72 0.72 1.28 1.15 1.04
Cash ratio 0.26 0.98 0.62 0.44 0.36 0.43 0.39 0.36 0.81 0.80 0.79 0.61 0.49 1.41 1.36 0.43 0.40 1.01 0.90 0.77

Progress Software Corporation's liquidity ratios have shown fluctuations over the past few years.

1. Current Ratio: The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has been somewhat volatile. It improved from 1.19 in February 2020 to a high of 1.87 in August 2021 but then declined to 0.81 by November 2024. A current ratio above 1 indicates that the company has more current assets than current liabilities, suggesting good short-term financial health.

2. Quick Ratio: The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, followed a similar trend as the current ratio. It ranged from a low of 0.62 in November 2024 to a high of 1.70 in August 2021. The quick ratio also dropped below 1 in some periods, indicating a potential strain on the company's ability to meet immediate obligations without relying on inventory.

3. Cash Ratio: The cash ratio, which focuses solely on the company's ability to cover short-term liabilities with its cash and cash equivalents, displayed variations over the years. It increased from 0.40 in November 2020 to a peak of 1.41 in August 2021 before declining back to 0.26 by November 2024. A cash ratio above 1 implies that the company has enough cash to cover its short-term liabilities, reflecting a strong liquidity position.

Overall, while Progress Software Corporation's liquidity ratios have shown fluctuations, with some periods indicating strong liquidity and others reflecting potential challenges, it is essential for the company to closely monitor and manage its liquidity position to ensure it can meet its short-term obligations effectively.

Additional liquidity measure

Nov 30, 2024 Aug 31, 2024 May 31, 2024 Feb 29, 2024 Nov 30, 2023 Aug 31, 2023 May 31, 2023 Feb 28, 2023 Nov 30, 2022 Aug 31, 2022 May 31, 2022 Feb 28, 2022 Nov 30, 2021 Aug 31, 2021 May 31, 2021 Feb 28, 2021 Nov 30, 2020 Aug 31, 2020 May 31, 2020 Feb 29, 2020
Cash conversion cycle days 40.34 13.90 18.40 18.15 30.46 26.60 24.54 15.67 42.94 39.12 11.16 35.71 40.04 22.56 -9.87 5.85 10.74 14.55 0.39 2.04

Progress Software Corporation's cash conversion cycle has shown fluctuations over the years, starting from 2.04 days in February 2020 and reaching a peak of 42.94 days in November 2022. The cash conversion cycle measures how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

A lower number of days indicates that Progress Software is efficient in managing its working capital, while a higher number of days suggests inefficiencies. The negative value of -9.87 days in May 2021 indicates that the company was able to collect cash from customers before paying its suppliers and employees during that period.

However, a significant increase to 40.34 days in November 2024 indicates a potential delay in converting sales into cash. If this trend continues, it could signal potential liquidity challenges or inefficient working capital management at Progress Software.

Overall, monitoring the cash conversion cycle is crucial for understanding the company's liquidity position, operational efficiency, and potential financial risks.