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GuruFocus has detected 5 Warning Signs with Quality Systems Inc \$QSII.
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Quality Systems Inc (NAS:QSII)
Current Ratio
1.14 (As of Dec. 2016)

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Quality Systems Inc's current ratio for the quarter that ended in Dec. 2016 was 1.14.

Quality Systems Inc has a current ratio of 1.14. It generally indicates good short-term financial strength.

QSII' s Current Ratio Range Over the Past 10 Years
Min: 1.14   Max: 7.71
Current: 1.14

1.14
7.71

During the past 13 years, Quality Systems Inc's highest Current Ratio was 7.71. The lowest was 1.14. And the median was 2.71.

QSII's Current Ratio is ranked lower than
78% of the 1750 Companies
in the Global Health Information Services industry.

( Industry Median: 1.94 vs. QSII: 1.14 )

Definition

The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.

Quality Systems Inc's Current Ratio for the fiscal year that ended in Mar. 2016 is calculated as

 Current Ratio (A: Mar. 2016 ) = Total Current Assets (A: Mar. 2016 ) / Total Current Liabilities (A: Mar. 2016 ) = 183.991 / 138.06 = 1.33

Quality Systems Inc's Current Ratio for the quarter that ended in Dec. 2016 is calculated as

 Current Ratio (Q: Dec. 2016 ) = Total Current Assets (Q: Dec. 2016 ) / Total Current Liabilities (Q: Dec. 2016 ) = 134.834 / 117.952 = 1.14

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.

Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.

The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.

If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Quality Systems Inc Annual Data

 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 current ratio 2.36 2.14 2.24 2.17 2.07 2.42 2.34 2.10 1.81 1.33

Quality Systems Inc Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 current ratio 1.89 1.88 1.81 1.87 1.92 1.92 1.33 1.30 1.16 1.14
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