Thryv Holdings Inc (THRY)

Thryv Holdings Inc's liquidity ratios have fluctuated over the periods analyzed. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has shown some volatility, ranging from a low of 1.01 to a high of 1.83. While the current ratio has generally remained above 1, indicating that Thryv Holdings Inc has had sufficient current assets to cover its current liabilities, the downward trend observed from 2021 to 2024 warrants monitoring to ensure the company's short-term liquidity remains stable.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Thryv Holdings Inc's quick ratio has generally been low, with values below 1 indicating potential difficulty in meeting current obligations without relying on inventory. The ratio has varied between 0.01 and 0.09, reflecting a limited ability to cover immediate liabilities with highly liquid assets. A consistent improvement in the quick ratio over time would enhance the company's ability to meet short-term financial commitments.

The cash ratio, the most stringent measure of liquidity, focuses solely on cash and cash equivalents to cover current liabilities. Thryv Holdings Inc's cash ratio has also exhibited fluctuations, ranging from 0.00 to 0.09. The cash ratio remaining consistently low indicates the company's dependence on non-cash current assets to fulfill short-term obligations. Increasing this ratio could enhance Thryv Holdings Inc's liquidity position and provide a stronger financial cushion.

Overall, Thryv Holdings Inc's liquidity ratios suggest a need for close monitoring, especially regarding the declining trend in the current ratio and the consistently low levels of the quick and cash ratios. Improving these ratios can enhance the company's ability to manage short-term financial obligations effectively and maintain a healthy liquidity position.

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Additional liquidity measure

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and accounts receivable back into cash. Thryv Holdings Inc's cash conversion cycle has varied over the past several quarters, ranging from 0 days to 38.12 days. A shorter cash conversion cycle indicates the company is able to efficiently convert its resources into cash, while a longer cycle may suggest inefficiencies or potential cash flow challenges.

In the most recent quarter, Thryv Holdings Inc reported a cash conversion cycle of 37.17 days, which indicates that the company took over a month on average to convert its investments in inventory and accounts receivable into cash. This longer cycle could be a result of slower collections on receivables or inventory management issues.

Looking back at historical data, the company has shown fluctuations in its cash conversion cycle, with some periods of more efficient conversion and others with longer cycles. For example, in the fourth quarter of 2021, the company significantly improved its cash conversion cycle to just 20.05 days, indicating better management of its working capital.

Overall, Thryv Holdings Inc should closely monitor its cash conversion cycle to ensure efficient use of its resources and prompt conversion of inventory and receivables into cash. By identifying and addressing any inefficiencies in the cycle, the company can improve its cash flow management and overall financial performance.