Simulations Plus Inc (SLP)
Liquidity ratios
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 8.81 | 15.10 | 10.88 | 15.22 | 21.91 | 18.50 | 18.98 | 24.49 | 15.95 | 14.55 | 12.04 | 18.90 | 20.72 | 23.96 | 23.45 | 2.85 | 4.50 | 4.10 | 4.43 | 4.19 |
| Quick ratio | 8.37 | 14.47 | 10.48 | 14.70 | 21.12 | 17.82 | 18.36 | 23.79 | 15.50 | 14.16 | 11.53 | 18.08 | 19.73 | 23.02 | 22.42 | 2.34 | 3.56 | 3.37 | 3.44 | 3.56 |
| Cash ratio | 7.47 | 13.26 | 9.63 | 13.56 | 19.22 | 16.36 | 16.58 | 20.65 | 13.83 | 12.93 | 10.68 | 16.32 | 18.00 | 21.68 | 21.07 | 0.94 | 2.23 | 2.24 | 2.39 | 2.03 |
Simulations Plus Inc's liquidity ratios have shown strong and consistent performance over the periods analyzed. The current ratio indicates the company's ability to meet short-term obligations using current assets, and it has increased steadily from 8.81 in February 2020 to 21.91 in May 2023 before stabilizing around 15-18 in recent periods. This indicates that the company has a comfortable cushion of current assets to cover its current liabilities.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also demonstrates a similar trend, ranging from 8.37 to 21.12 during the same period. This indicates that even without relying on inventory, the company can readily cover its short-term obligations.
The cash ratio, which is the most conservative liquidity ratio, focusing solely on cash and cash equivalents, has also shown a positive trend, ranging from 7.47 to 19.22 over the same period. This suggests that the company holds sufficient cash to meet its immediate obligations without relying on other current assets.
Overall, Simulations Plus Inc's liquidity ratios indicate a solid financial position with ample liquidity to meet its short-term obligations. The consistent improvement in these ratios reflects a well-managed liquidity position, which is essential for the company's operational stability and financial health.
Additional liquidity measure
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 65.84 | 53.29 | 83.21 | 55.03 | 78.10 | 105.52 | 132.68 | 126.96 | 111.34 | 108.44 | 98.90 | 109.23 | 119.37 | 70.36 | 86.35 | 89.21 | 63.93 | 45.50 | 76.71 | 77.90 |
The cash conversion cycle of Simulations Plus Inc has varied over the past 20 reporting periods, with fluctuations in the number of days it takes to convert resources invested in the operating cycle into cash inflows. The average cash conversion cycle over this period is approximately 89.14 days.
Analyzing the recent trends, the company's cash conversion cycle has shown some volatility, ranging from a low of 45.50 days to a high of 132.68 days. The cycle was relatively stable in the most recent period at 65.84 days, indicating a moderate efficiency in managing cash flow from operational activities.
It is important to note that a shorter cash conversion cycle is generally favorable as it indicates that the company is efficiently managing its working capital and converting sales into cash quickly. Conversely, a longer cash conversion cycle may suggest inefficiencies in managing inventory, receivables, and payables, leading to potential liquidity challenges.
Overall, monitoring and managing the cash conversion cycle is crucial for Simulations Plus Inc to ensure efficient utilization of resources and maintain healthy liquidity levels to support its ongoing operations and growth initiatives.