VeriSign Inc (VRSN)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.83 | 0.93 | 1.18 | 1.23 | 1.32 |
| Quick ratio | 0.79 | 0.89 | 1.13 | 1.19 | 1.29 |
| Cash ratio | 0.78 | 0.88 | 1.13 | 1.19 | 1.27 |
Verisign Inc.'s liquidity ratios have shown a declining trend over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has decreased from 1.32 in 2019 to 0.83 in 2023. This indicates a decrease in the company's short-term liquidity position over the years.
Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also decreased from 1.32 in 2019 to 0.83 in 2023. This suggests that Verisign Inc. may be facing challenges in meeting its short-term obligations without relying on inventory.
The cash ratio, which provides the most conservative measure of liquidity by only considering cash and cash equivalents, has followed a similar declining trend from 1.31 in 2019 to 0.82 in 2023. This indicates a decreasing ability of the company to cover its short-term liabilities solely with its readily available cash.
Overall, the declining trend in Verisign Inc.'s liquidity ratios suggests a potential deterioration in its short-term financial position and may indicate a need for the company to closely monitor and manage its liquidity in the upcoming periods.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -21.58 | -16.23 | -15.66 | -23.66 | -27.36 |
The cash conversion cycle of Verisign Inc. has fluctuated over the past five years. In 2023, it increased to 3.32 days from 2.07 days in 2022, indicating that the company took longer to convert its investments in inventory into cash receipts from customers. This could be a sign of inefficiency in managing its working capital.
In 2021, the cash conversion cycle was 3.56 days, higher than in 2020 when it was 2.37 days. The increase suggests a possible delay in collecting accounts receivable or selling inventory, leading to a longer cash conversion cycle.
The most significant increase in the cash conversion cycle was observed in 2019, when it reached 5.14 days. This could indicate that the company faced challenges in managing its operating cycle efficiently, potentially impacting its liquidity and cash flow.
Overall, analyzing the cash conversion cycle provides insights into how effectively Verisign Inc. is managing its working capital and converting its investments into cash. Monitoring this ratio over time can help identify trends and potential areas for improvement in the company's cash flow management.