Pure Storage Inc (PSTG)

Based on the provided data on Pure Storage Inc's liquidity ratios, we observe the following trends:

1. Current Ratio:
- The current ratio has generally been above 1, indicating that Pure Storage Inc has had sufficient current assets to cover its current liabilities.
- The ratio has fluctuated over time, with a range of 1.30 to 3.35. Higher values indicate a stronger liquidity position.
- The current ratio peaked in May 2020 at 3.35 and has since remained relatively stable above 2, reflecting the company's ability to meet its short-term obligations.

2. Quick Ratio:
- The quick ratio, which focuses on more liquid assets, has also generally been above 1, suggesting Pure Storage Inc's ability to meet its short-term liabilities without relying on inventory.
- There are fluctuations in the quick ratio range from 0.89 to 2.43. Higher values indicate a stronger ability to cover current liabilities with more liquid assets.
- The quick ratio reached its highest point in May 2020 at 2.43, showing a strong liquidity position at that time.

3. Cash Ratio:
- The cash ratio, which is the most conservative liquidity measure, has been above 1 for the most part, indicating Pure Storage Inc's ability to cover its current liabilities with cash and cash equivalents.
- The cash ratio ranges from 0.89 to 2.43, with higher values indicating a more conservative liquidity position.
- The highest cash ratio was recorded in May 2020 at 2.43, reflecting a strong ability to cover short-term obligations with cash on hand.

Overall, the liquidity ratios indicate that Pure Storage Inc has maintained a sound liquidity position over the periods analyzed, with the ability to meet its short-term obligations using current assets, liquid assets, and cash reserves.

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Additional liquidity measure

The cash conversion cycle of Pure Storage Inc has shown fluctuations over the periods indicated. It is a measure of how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

From February 2024 to November 2022, the company had positive cash conversion cycles ranging from 59.18 days to 85.88 days, indicating that it took Pure Storage Inc anywhere from around 2 months to almost 3 months to convert its investments into cash. This suggests longer operating cycles and potentially slower collection from customers or higher inventory turnover.

However, the company exhibited negative cash conversion cycles from August 2022 to January 2021, with the cycle ranging from -17.64 days to -1.73 days. This implies that Pure Storage Inc was able to convert its investments into cash before having to pay its suppliers, indicating efficient collection from customers or lower inventory turnover.

Overall, the company's cash conversion cycle has been fluctuating, with both positive and negative cycles observed in the periods provided. Further analysis would be needed to understand the specific drivers behind these fluctuations and assess the overall effectiveness of Pure Storage Inc's working capital management.