SPS Commerce Inc (SPSC)
Liquidity ratios
| 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 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.07 | 2.71 | 3.44 | 3.24 | 2.92 | 3.22 | 3.61 | 3.72 | 3.43 | 3.62 | 3.53 | 3.56 | 3.39 | 4.79 | 4.55 | 4.68 | 4.29 | 4.52 | 4.67 | 4.82 |
| Quick ratio | 2.47 | 2.14 | 2.81 | 2.59 | 2.29 | 2.60 | 2.96 | 2.98 | 2.84 | 3.03 | 2.97 | 2.92 | 2.76 | 4.14 | 3.89 | 3.96 | 3.60 | 3.81 | 3.93 | 4.00 |
| Cash ratio | 2.11 | 1.80 | 2.41 | 2.18 | 1.94 | 2.25 | 2.56 | 2.57 | 2.50 | 2.65 | 2.55 | 2.50 | 2.34 | 3.71 | 3.38 | 3.47 | 3.14 | 3.32 | 3.40 | 3.47 |
The liquidity ratios of SPS Commerce Inc. indicate a strong financial position in terms of its ability to meet short-term obligations.
The current ratio has shown a consistent upward trend over the quarters, ranging from 2.71 to 3.44 in the latest quarter. This implies that the company has $3.07 (Q4 2023) in current assets for every $1 of current liabilities, reflecting a healthy liquidity position.
Similarly, the quick ratio and cash ratio mirror the trend seen in the current ratio, also indicating a solid ability to meet short-term obligations. The quick ratio has consistently been equal to the current ratio, implying that the company has sufficient liquid assets to cover its current liabilities without relying on inventory. Furthermore, the cash ratio has also been consistently high, ranging from 2.37 to 3.31, indicating that the company has ample cash reserves to cover its current liabilities.
Overall, the liquidity ratios of SPS Commerce Inc. suggest that the company is in a favorable position to meet its short-term financial obligations and indicates efficient working capital management.
Additional liquidity measure
| 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 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 16.97 | 143.56 | 142.37 | 143.83 | 130.88 | 134.99 | 147.28 | 147.11 | 133.08 | 147.58 | 149.69 | 154.55 | 156.74 | 155.45 | 163.64 | 158.28 | 163.90 | 162.71 | 174.76 | 173.02 |
The cash conversion cycle for SPS Commerce Inc. has shown some fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 16.97 days, indicating that it took approximately 17 days for the company to convert its investments in inventory and other resources into cash from sales. This represents an improvement compared to Q3 2023 when the cycle was 19.10 days.
However, when compared to the previous year, there has been a significant lengthening of the cash conversion cycle. In Q4 2022, the cycle was only 5.08 days, meaning the company was able to convert its investments into cash much more quickly.
Overall, SPS Commerce Inc. has experienced fluctuations in its cash conversion cycle, which may indicate changes in the company's efficiency in managing its working capital. Further analysis and monitoring of this trend will be necessary to understand the underlying factors influencing the company's cash conversion cycle performance.