QuinStreet Inc (QNST)

The liquidity ratios for QuinStreet Inc. from June 30, 2021, through June 30, 2025, reflect a trend of gradual decline over the observed period, with some indications of partial recovery in later years.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, started at 1.78 in June 2021. It decreased to 1.67 in June 2022 and remained relatively stable at 1.68 in June 2023. A notable decline occurred by June 2024, when the ratio fell to 1.34, indicating a reduced buffer between current assets and current liabilities. However, a slight recovery was observed in June 2025, with the ratio increasing to 1.51. Throughout this period, the current ratio remained above 1.0, implying that the company generally maintained sufficient current assets to cover its short-term liabilities, albeit with diminishing excess.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, followed a similar downward trend. It was at 1.71 in June 2021, decreasing to 1.62 in June 2022 and 1.57 in June 2023. The decline persisted into June 2024, where the quick ratio dropped to 1.28, but showed some improvement by June 2025, reaching 1.45. These figures suggest that the company's most liquid assets relative to its current liabilities have been decreasing over time, though they remained above 1.0, indicating it maintained the ability to cover immediate liabilities without reliance on inventory.

The cash ratio, which measures the most liquid assets—cash and cash equivalents—relative to current liabilities, exhibited a more pronounced decline. It stood at 0.95 in June 2021, and slightly decreased to 0.88 in June 2022 and 0.82 in June 2023. A significant reduction occurred by June 2024, when the ratio fell to 0.40, indicating a substantially lower proportion of cash relative to current liabilities. However, there was a partial recovery in June 2025, with the ratio increasing to 0.62. Despite the decline, the cash ratio remained below 1.0 throughout the period, suggesting that the company may have relied more on receivables, inventories, or alternative financing sources to meet short-term obligations, especially evident in the sharp drop observed in 2024.

Overall, QuinStreet Inc.'s liquidity ratios exhibit a downward trend over the analyzed period, reflecting a gradual deterioration in the company's liquidity position. While all ratios remained above the critical thresholds of 1.0 (except the cash ratio in 2024), the decreasing trend indicates increased liquidity risk and a potential need for the company to enhance its short-term asset management or financial flexibility to sustain operational stability.

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Additional liquidity measure

The cash conversion cycle (CCC) of QuinStreet Inc has exhibited notable fluctuations over the period from June 30, 2021, to June 30, 2025. Initially, the CCC was 28.28 days as of June 30, 2021, indicating the average time span required for the company to convert its investments in inventory and other resources into cash flows from sales. This period decreased to 24.75 days by June 30, 2022, reflecting a slight improvement in operational efficiency and a shorter cycle for converting resources into cash.

The downward trend continued into the subsequent year, with the CCC further reducing considerably to 16.57 days as of June 30, 2023. This significant reduction suggests that the company enhanced its operational or accounts receivable/payable management, reducing the time between cash outflows and inflows and thus improving liquidity and working capital efficiency.

However, the trend reversed in the following fiscal year, with the CCC increasing sharply to 35.53 days as of June 30, 2024. This increase indicates a deterioration in the company's ability to convert its operational activities into cash, perhaps due to increased receivables, extended payment terms, or other operational factors impacting the cycle length.

By June 30, 2025, the CCC decreased again to 22.20 days, implying a partial recovery but still reflecting a cycle longer than the nadir achieved in 2023. This pattern suggests variability in operational efficiency, with periods of improvement followed by setbacks that could be attributable to changes in credit policies, customer payment behavior, or supplier terms.

Overall, the company’s cash conversion cycle has demonstrated a pattern of variability, with periods of efficiency gains and setbacks. The fluctuations highlight a dynamic operational environment that affects liquidity management, requiring ongoing attention to receivables, payables, and inventory management practices to optimize the cycle duration and improve overall working capital efficiency.