PTC Inc (PTC)

The liquidity ratios of PTC Inc have shown some fluctuations over the past five years.

1. Current Ratio: This ratio indicates the company's ability to meet short-term obligations with its current assets. PTC Inc's current ratio decreased from 1.38 in 2021 to 0.78 in 2024, indicating a decline in its short-term liquidity position. A ratio below 1 suggests that the company may have difficulty in meeting its current liabilities with its current assets.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. PTC Inc's quick ratio followed a similar trend as the current ratio, decreasing from 1.11 in 2021 to 0.68 in 2024. This indicates a potential decrease in the company's ability to cover its short-term liabilities with its most liquid assets.

3. Cash Ratio: The cash ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents. PTC Inc's cash ratio also declined from 0.42 in 2021 to 0.16 in 2024, suggesting a reduction in the company's ability to meet its short-term obligations solely with cash holdings.

Overall, the declining trend in PTC Inc's liquidity ratios over the past years raises concerns about its short-term financial health and ability to meet its obligations promptly. It may indicate potential liquidity challenges that the company needs to address to maintain its financial stability.

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Additional liquidity measure

The cash conversion cycle of PTC Inc has fluctuated over the past five years:
- In September 2024, it was 129.90 days, showing a slight improvement from the previous year.
- In September 2023, the cycle was 137.75 days, indicating a longer time to convert investments in raw materials into cash from sales.
- In September 2022, there was a notable decrease to 111.30 days, suggesting a more efficient management of inventory, accounts receivable, and accounts payable.
- In September 2021, the cycle was 101.98 days, reflecting a further improvement in the company's ability to generate cash flow from its operations.
- In September 2020, it increased to 125.81 days, indicating a slower conversion of investments into cash compared to the previous year.

Overall, a decreasing cash conversion cycle is generally considered positive as it indicates that the company is able to convert its investments into cash more efficiently. However, fluctuations in the cycle over the years suggest that PTC Inc may need to focus on streamlining its operations further to maintain a consistent and efficient cash conversion cycle.