VeriSign Inc (VRSN)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.43 | 0.83 | 0.93 | 1.18 | 1.23 |
| Quick ratio | 0.40 | 0.79 | 0.89 | 1.13 | 1.19 |
| Cash ratio | 0.40 | 0.78 | 0.88 | 1.13 | 1.19 |
VeriSign Inc's liquidity ratios have shown a general downward trend over the years. The current ratio, which indicates the company's ability to cover its short-term liabilities with its current assets, decreased from 1.23 in 2020 to 0.43 in 2024. This suggests a decline in the company's short-term liquidity position over the period.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also decreased from 1.19 in 2020 to 0.40 in 2024. This indicates a diminishing ability to meet short-term obligations without relying on inventory.
The cash ratio, which offers the most conservative measure of liquidity by considering only cash and cash equivalents, decreased from 1.19 in 2020 to 0.40 in 2024. This decline highlights a reduction in VeriSign Inc's ability to cover its short-term liabilities solely with its cash reserves.
Overall, the decreasing trend in these liquidity ratios suggests a potential liquidity challenge for VeriSign Inc, indicating a need to closely monitor its ability to meet its short-term financial obligations in the upcoming years.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -18.90 | -21.58 | -16.23 | -15.66 | -23.66 |
Based on the provided data, VeriSign Inc's cash conversion cycle has shown a fluctuating trend over the years. The cash conversion cycle represents the average number of days it takes for a company to convert its investments in inventory and other resources into cash from sales.
VeriSign Inc has exhibited a negative cash conversion cycle in all the years, indicating efficient management of its working capital. A negative cash conversion cycle implies that the company is able to collect cash from customers before it needs to pay its suppliers, which can be beneficial for liquidity and cash flow management.
The cash conversion cycle decreased from -23.66 days in December 2020 to -15.66 days by December 2021, showcasing an improvement in efficiency in converting investments into cash. However, there was a slight increase to -16.23 days by December 2022, followed by a further increase to -21.58 days by December 2023, before declining again to -18.90 days by December 2024.
Overall, VeriSign Inc's cash conversion cycle has remained in the negative territory, indicating effective management of working capital and strong control over the timing of cash flows from operations. This trend suggests that the company has been successful in balancing its payment terms with its customers and suppliers to optimize its cash position.