Pure Storage Inc (PSTG)

Pure Storage Inc's current ratio has shown a consistent improvement over the years, increasing from 1.41 in January 2023 to 1.61 in January 2025. This indicates that the company's current assets are sufficient to cover its current liabilities, providing a healthy buffer for short-term obligations.

On the other hand, the quick ratio, which excludes inventory from current assets, fluctuated between 0.90 and 1.61 during the same period. While the ratio exceeded 1 in February 4, 2024, suggesting a strong ability to meet short-term liabilities without relying on inventory sales, it fell back to 0.95 by January 31, 2025. This may indicate a slight liquidity concern or a change in the composition of current assets.

Looking at the cash ratio, which measures the company's ability to cover current liabilities using only cash and cash equivalents, Pure Storage Inc's liquidity position appears stable, remaining above 1 throughout the period. This indicates a solid ability to settle short-term obligations using readily available cash resources.

Overall, Pure Storage Inc has maintained a generally healthy liquidity position, with the current ratio showing improvement over time, while the quick ratio and cash ratio remained relatively stable, reflecting the company's ability to meet its short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle for Pure Storage Inc shows fluctuations over the years. As of January 31, 2023, the company had a cash conversion cycle of 22.22 days, indicating a relatively efficient cash management. However, by February 5, 2023, the cycle increased significantly to 78.60 days, which may suggest delayed collections or longer inventory turnover.

In the following years, there were further fluctuations in the cash conversion cycle. By January 31, 2024, the cycle decreased to 19.24 days, showing improved efficiency in managing cash flows. But by February 4, 2024, it surged to 78.97 days, which could indicate challenges in cash collection or inventory management.

As of January 31, 2025, the cash conversion cycle decreased to 16.35 days, reflecting a positive trend towards faster conversion of inventory and receivables into cash. Overall, the fluctuations in Pure Storage Inc's cash conversion cycle highlight the importance of monitoring working capital management to ensure optimal cash flow efficiency.