SolarWinds Corp (SWI)

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 0.85 0.71 0.62 0.71 0.90 0.83 0.76 0.73 0.67 1.47 2.15 2.13 2.08 2.02 1.22 1.13 1.04 1.26 1.06 0.91
Quick ratio 0.79 0.66 0.57 0.67 0.84 0.75 0.60 0.58 0.55 1.35 2.09 2.07 2.00 1.95 1.15 1.05 0.99 1.22 1.01 0.85
Cash ratio 0.55 0.44 0.37 0.50 0.62 0.54 0.41 0.33 0.33 1.14 1.89 1.83 1.77 1.74 0.92 0.80 0.75 0.95 0.77 0.56

The liquidity ratios of SolarWinds Corp demonstrate the company's ability to meet its short-term financial obligations.

1. Current Ratio: The current ratio shows a fluctuating trend over the years, with values ranging from 0.67 to 2.15. The ratio has been above 1 for most periods, indicating that the company generally has more current assets to cover its current liabilities. However, there are some quarters where the ratio drops below 1, suggesting potential difficulties in meeting short-term obligations during those periods.

2. Quick Ratio: The quick ratio reveals a similar pattern to the current ratio, with values varying between 0.55 and 2.09. Like the current ratio, the quick ratio surpasses 1 in most periods, indicating the company's ability to cover its immediate liabilities with its most liquid assets. However, similar to the current ratio, there are instances where the quick ratio falls below 1.

3. Cash Ratio: The cash ratio reflects the company's ability to meet its short-term liabilities using only its cash and cash equivalents. The values of the cash ratio range from 0.33 to 1.89. The company maintains a solid cash position, with the ratio generally above 1 in recent periods. This implies that SolarWinds Corp has a sufficient cash position to meet its short-term obligations without relying on other current assets.

Overall, while SolarWinds Corp demonstrates the ability to cover its short-term liabilities, there are periods where the current and quick ratios fall below 1, indicating potential liquidity challenges during those time frames. The gradual increase in the ratios over time suggests improved liquidity management by the company.

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 47.38 40.16 34.90 42.18 42.90 38.84 37.28 52.24 47.53 45.10 40.27 41.79 37.08 20.78 34.58 27.68 37.97 34.51 28.81 34.55

The cash conversion cycle of SolarWinds Corp has fluctuated over the reporting periods. The company's cash conversion cycle, a measure of how efficiently a company is able to convert its resources into cash flows, shows variability in the number of days it takes for SolarWinds to convert its investments in inventory and accounts receivable into cash flows from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 20.78 days to a high of 52.24 days. The lower the number of days, the faster the company is converting its investments into cash. Conversely, a higher number of days indicates that SolarWinds takes longer to convert its resources into cash.

It's notable that there are certain quarters where the cash conversion cycle decreased, indicating improvements in efficiency, followed by periods where it increased, suggesting potential challenges in managing inventory or collecting accounts receivables.

Analyzing the trend of the cash conversion cycle over time can provide insights into potential operational inefficiencies, working capital management, and the company's ability to generate cash flows from its core business activities. Tracking and evaluating this metric can assist stakeholders in assessing SolarWinds Corp's financial health and operational effectiveness.