Qualys Inc (QLYS)

Qualys Inc's liquidity ratios provide insights into its ability to meet short-term obligations and cover immediate financial needs.

1. Current Ratio: This ratio indicates the company's ability to pay off its short-term liabilities with its current assets. Over the past five years, Qualys Inc's current ratio has been relatively stable, ranging from 1.34 to 1.86. A current ratio above 1 suggests that the company has sufficient current assets to cover its current liabilities. Qualys Inc's current ratio of 1.54 in 2023 indicates that the company has $1.54 in current assets for every dollar of current liabilities.

2. Quick Ratio: Also known as the acid-test ratio, this ratio provides a more stringent measure of liquidity by excluding inventory from current assets. Qualys Inc's quick ratio has mirrored its current ratio over the years, indicating that the company's liquid assets are a significant portion of its current assets. The quick ratio of 1.54 in 2023 is consistent with the current ratio, showing the company's ability to cover its short-term obligations without relying on inventory.

3. Cash Ratio: This ratio measures the company's ability to pay off its short-term liabilities using only its cash and cash equivalents. Qualys Inc's cash ratio has shown fluctuations over the years, ranging from 1.00 to 1.47. A cash ratio above 1 signifies that the company holds sufficient cash to cover its current liabilities. The cash ratio of 1.16 in 2023 indicates that Qualys Inc has $1.16 in cash and cash equivalents for every dollar of current liabilities.

Overall, Qualys Inc's liquidity ratios reflect a generally stable and sound liquidity position over the past five years, with the company maintaining a comfortable level of current assets to meet its short-term obligations.

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Additional liquidity measure

The cash conversion cycle of Qualys Inc has fluctuated over the past five years, ranging from 80.80 days in 2022 to 97.37 days in 2020. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates a more efficient use of resources and faster cash generation.

In 2023, the cash conversion cycle increased to 92.91 days compared to the prior year. This suggests that Qualys Inc took longer to convert its investments into cash flows from sales, which may be indicative of challenges in managing inventory, collecting receivables, or extending payment periods to suppliers.

Overall, it is essential for Qualys Inc to monitor and manage its cash conversion cycle effectively to optimize its working capital management and improve overall operational efficiency in converting investments into cash inflows.