ScanSource Inc (SCSC)
Liquidity ratios
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.10 | 2.20 | 2.30 | 2.15 | 2.11 | 2.12 | 2.05 | 2.00 | 1.87 | 1.76 | 1.79 | 1.81 | 1.66 | 1.80 | 1.62 | 1.49 | 1.67 | 1.86 | 1.85 | 1.92 |
| Quick ratio | 1.28 | 1.16 | 1.16 | 1.05 | 1.10 | 0.97 | 1.01 | 0.99 | 1.03 | 0.86 | 0.87 | 0.93 | 0.96 | 0.90 | 0.87 | 0.67 | 0.74 | 0.85 | 0.83 | 0.91 |
| Cash ratio | 0.28 | 0.25 | 0.07 | 0.06 | 0.05 | 0.05 | 0.08 | 0.05 | 0.05 | 0.05 | 0.05 | 0.08 | 0.09 | 0.08 | 0.10 | 0.06 | 0.04 | 0.04 | 0.05 | 0.03 |
ScanSource Inc's liquidity ratios have shown fluctuations over the past several quarters. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has ranged from 1.49 to 2.30. Although there have been some variations, the current ratio has generally remained above 2, indicating a healthy liquidity position.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has fluctuated between 0.67 and 1.28. This ratio has shown more volatility compared to the current ratio, but it has generally been above 1, suggesting that ScanSource Inc has an adequate ability to meet its short-term obligations without relying on inventory liquidation.
The cash ratio, representing the company's ability to cover its current liabilities with its cash and cash equivalents, has ranged from 0.03 to 0.28. This ratio has shown significant variability over the periods analyzed, with some quarters having very low cash ratios. This could indicate fluctuations in the company's cash position and its ability to quickly meet its obligations with cash on hand.
Overall, while the current and quick ratios indicate that ScanSource Inc has generally maintained a solid liquidity position, the fluctuating cash ratio highlights the importance of monitoring the company's cash management practices and ensuring sufficient liquidity to cover short-term obligations.
Additional liquidity measure
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 66.29 | 59.40 | 71.08 | 72.22 | 86.68 | 75.58 | 77.23 | 71.74 | 72.24 | 56.00 | 57.53 | 53.80 | 55.11 | 65.94 | 51.68 | 50.99 | 59.79 | 64.84 | 68.21 | 71.92 |
The cash conversion cycle of ScanSource Inc has varied over the past quarters. 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 to customers.
In the most recent quarter, the cash conversion cycle was 66.29 days, which indicates that it took the company approximately 66 days to convert its investments in inventory into cash from sales. This represents an increase from the previous quarter, where the cycle was 59.40 days.
Looking at the trend over the past few quarters, the cash conversion cycle fluctuated between 50 to 86 days. This variability suggests potential challenges in managing inventory levels, collecting receivables, and effectively managing payables.
It is essential for ScanSource Inc to monitor and continuously improve its cash conversion cycle to optimize working capital efficiency and maximize profitability. This can be achieved by streamlining inventory management, improving accounts receivable collection processes, and negotiating favorable payment terms with suppliers.