Allocate SoftwareLSE:ALLA Current Ratio is 1.36 as of May. 2014, which is 22% below its 10-year median of 1.75. The stock has 1 warning sign investors should review.
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. Allocate Software's current ratio for the quarter that ended in May. 2014 was 1.36.
Allocate Software has a current ratio of 1.36. It generally indicates good short-term financial strength.
The historical rank and industry rank for Allocate Software's Current Ratio or its related term are showing as below:
LSE:ALLA'
s Current Ratio Range Over the Past 10 Years
Min: 0.58 Med: 1.75 Max: 4.23
Current: 1.36
During the past 13 years, Allocate Software's highest Current Ratio was 4.23. The lowest was 0.58. And the median was 1.75.
LSE:ALLA's Current Ratio is not ranked
in the Software industry.
Industry Median: 1.815
vs LSE:ALLA: 1.36
Allocate Software (LSE:ALLA) Current Ratio 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.
Allocate Software Current Ratio Related Terms
Allocate Software Current Ratio Historical Data
* Premium members only.
The historical data trend for Allocate Software's Current Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Application subindustry, Allocate Software's Current Ratio, along with its competitors' market caps and Current Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Allocate Software Current Ratio vs Software Industry
For the Software industry and Technology sector, Allocate Software's Current Ratio distribution charts can be found below:
* The bar in red indicates where Allocate Software's Current Ratio falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Allocate Software (LSE:ALLA) has a Current Ratio of 1.36 as of May. 2014. This is 22% below median its historical median of 1.75. Over the past decade, Allocate Software's Current Ratio has ranged from 0.58 to 4.23.
Is Allocate Software's Current Ratio too high?
Allocate Software's current Current Ratio of 1.36 is 22% below median its 10-year median of 1.75. Over the past 10 years, this metric has ranged from a low of 0.58 to a high of 4.23. The Software industry median Current Ratio is 1.82. Allocate Software's value of 1.36 is 25.1% below this industry median.
How does Allocate Software's Current Ratio compare to SREV and ASUR?
Allocate Software's Current Ratio of 1.36 can be compared against companies in the Software industry. The industry median Current Ratio is 1.82. Allocate Software's value of 1.36 is 25.1% below this benchmark. Historically, Allocate Software's own Current Ratio has ranged from 0.58 to 4.23 over the past decade. While the company's 10-year median is 1.75 vs. the industry median of 1.82, Allocate Software has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Current Ratio for a Software company?
The median Current Ratio among Software companies is 1.82, based on 2,866 companies in the industry. Companies in the top quartile (top 25%) have a Current Ratio significantly above this median, while those in the bottom quartile fall well below. However, Current Ratio should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Allocate Software's current Current Ratio of 1.36 is 25.1% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Current Ratio mean?
A high Current Ratio can signal that a stock is expensive relative to its fundamentals. For the Software industry, the median Current Ratio is 1.82 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Allocate Software's current Current Ratio is 1.36, which is 22% below median its own 10-year median of 1.75. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Allocate Software stock overvalued right now?
Allocate Software (LSE:ALLA) has a current Current Ratio of 1.36. The current Current Ratio is 1.36, which is 22% below median its 10-year median of 1.75 and 25.1% below the Software industry median of 1.82. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Current Ratio calculated?
Current Ratio is calculated from a company's financial statements. For Allocate Software (LSE:ALLA), the current Current Ratio is 1.36 as of May. 2014. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Allocate Software PLC is engaged in the development, sale and support of workforce management solutions, and the provision of related IT services to major healthcare, defence, government and commercial customers. The business of the company is focused principally on the Healthcare market in addition to Defence. Its segments are Licence, Subscriptions, Support, and Services. Licence and Subscriptions segments represent the sale of non-cancellable software licence agreements and subscriptions associated with that software. Support and Services segments represent the provision of installation, consulting, training and product support. It operates in UK, Europe, USA and Australia.
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