SPS Commerce Inc (SPSC)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.60 | 2.36 | 3.17 | 3.13 | 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 |
| Quick ratio | 2.00 | 1.79 | 2.55 | 2.56 | 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 |
| Cash ratio | 1.64 | 1.41 | 2.11 | 2.17 | 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 |
SPS Commerce Inc's liquidity ratios show a consistent trend over the years.
The current ratio, which measures the company's ability to pay short-term obligations with its current assets, decreased from 4.68 in March 2020 to 2.60 in December 2024. This downward trend indicates a gradual reduction in the company's short-term liquidity position.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, followed a similar pattern, declining from 3.96 in March 2020 to 2.00 in December 2024. This suggests that the company may have difficulties meeting its short-term obligations without relying on inventory.
The cash ratio, which reflects the company's ability to pay off immediate liabilities with cash and cash equivalents, decreased from 3.47 in March 2020 to 1.64 in December 2024. This shows a decline in the company's ability to cover its short-term obligations solely with its cash reserves.
Overall, the decreasing trend in all three liquidity ratios indicates a potential reduction in SPS Commerce Inc's ability to meet its short-term financial obligations as of December 2024. Further analysis and monitoring of the company's liquidity position may be necessary to assess its financial health accurately.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 14.92 | 18.66 | 23.80 | 10.38 | 16.97 | 143.56 | 142.37 | 143.83 | 130.88 | 134.99 | 23.93 | 147.11 | 133.08 | 147.58 | 149.69 | 154.55 | 156.74 | 155.45 | 163.64 | 158.28 |
The cash conversion cycle of SPS Commerce Inc has exhibited fluctuations over the years but generally shows a decreasing trend from March 31, 2020, to December 31, 2023, where it reached a low of 16.97 days. This suggests that the company has been able to manage its cash flow more efficiently by reducing the time it takes to convert its investments in inventory back into cash.
However, there was a significant spike in the cash conversion cycle on June 30, 2024, to 23.80 days before decreasing to 18.66 days on September 30, 2024. This increase could indicate potential issues with inventory management or delays in collecting receivables during that period.
The sharp decline in the cash conversion cycle on December 31, 2024, to 14.92 days may indicate an improvement in working capital management efficiency during that quarter. Overall, monitoring the cash conversion cycle is crucial for assessing the effectiveness of SPS Commerce Inc in managing its cash flow and working capital requirements.