Pure Storage Inc (PSTG)
Liquidity ratios
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 4, 2024 | Jan 31, 2024 | Nov 5, 2023 | Oct 31, 2023 | Aug 6, 2023 | Jul 31, 2023 | Apr 30, 2023 | Feb 5, 2023 | Jan 31, 2023 | Nov 6, 2022 | Oct 31, 2022 | Aug 7, 2022 | Jul 31, 2022 | May 8, 2022 | Apr 30, 2022 | Feb 6, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.61 | 1.77 | 1.99 | 1.93 | 1.83 | 1.76 | 1.82 | 1.82 | 1.70 | 1.70 | 1.69 | 1.41 | 1.41 | 1.36 | 1.36 | 1.32 | 1.32 | 1.30 | 2.16 | 2.30 |
| Quick ratio | 0.95 | 1.14 | 1.42 | 1.41 | 1.61 | 1.12 | 1.61 | 1.09 | 1.46 | 1.02 | 1.07 | 1.25 | 0.90 | 0.90 | 0.90 | 0.89 | 0.89 | 0.90 | 1.49 | 2.05 |
| Cash ratio | 0.95 | 1.14 | 1.42 | 1.41 | 1.12 | 1.12 | 1.09 | 1.09 | 1.02 | 1.02 | 1.07 | 0.90 | 0.90 | 0.90 | 0.90 | 0.89 | 0.89 | 0.90 | 1.49 | 1.48 |
Pure Storage Inc's liquidity ratios show a certain level of fluctuation over the period analyzed.
The current ratio, which measures the company's ability to cover its short-term obligations with its short-term assets, started relatively high at 2.30 in February 2022, declined to 1.30 in May 2022, and gradually improved to 1.61 in January 2025. Overall, Pure Storage Inc's current ratio indicates that it has generally been able to meet its short-term obligations with its current assets throughout the period.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also fluctuated but generally remained above 1, indicating the company's ability to meet its immediate obligations without relying on selling inventory. It started at 2.05 in February 2022, dropped to 0.89 in July 2022, and then recovered to 0.95 in January 2025.
The cash ratio, which is the most conservative liquidity ratio focusing solely on cash and cash equivalents to cover short-term liabilities, showed a similar trend to the quick ratio. Starting at 1.48 in February 2022, it dropped to 0.89 inJuly 2022, and then gradually increased to 0.95 in January 2025.
In conclusion, Pure Storage Inc's liquidity position, as indicated by its current, quick, and cash ratios, shows some variability over time but generally suggests the company has maintained a sound ability to meet its short-term obligations with its available liquid assets.
Additional liquidity measure
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 4, 2024 | Jan 31, 2024 | Nov 5, 2023 | Oct 31, 2023 | Aug 6, 2023 | Jul 31, 2023 | Apr 30, 2023 | Feb 5, 2023 | Jan 31, 2023 | Nov 6, 2022 | Oct 31, 2022 | Aug 7, 2022 | Jul 31, 2022 | May 8, 2022 | Apr 30, 2022 | Feb 6, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 16.35 | 12.32 | 13.20 | 9.95 | 68.31 | 10.78 | 66.23 | 15.49 | 56.41 | 14.27 | 12.57 | 71.22 | 13.37 | -11.45 | 16.34 | -3.16 | 13.40 | -4.36 | 13.06 | 72.07 |
The cash conversion cycle (CCC) of Pure Storage Inc experienced fluctuations over the period covered in the data. The CCC is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Analyzing the data provided, we observe that Pure Storage Inc's CCC ranged from -11.45 days to 72.07 days. A negative CCC indicates that the company is able to collect cash from customers before paying its suppliers, which can be advantageous as it signifies efficient cash management.
The CCC showed improvements during some periods, such as April 30, 2022, May 8, 2022, August 7, 2022, November 6, 2022, February 4, 2024, and April 30, 2024, where the CCC was negative or significantly reduced. These improvements suggest efficient management of working capital, faster inventory turnover, and quicker collection of receivables.
However, there were also instances where the CCC increased, such as February 6, 2022, February 5, 2023, August 6, 2023, November 5, 2023, and February 4, 2024. These increases may indicate delays in the collection of receivables or slower inventory turnover, which could tie up cash in the business for longer periods.
Overall, Pure Storage Inc's CCC analysis highlights the importance of managing working capital efficiently to optimize cash flow and liquidity. Further assessment of the underlying reasons for the fluctuations in the CCC could provide valuable insights into the company's operational efficiency and financial health.