ASGN Inc (ASGN)

ASGN Inc's liquidity ratios provide insights into its ability to meet its short-term obligations and financial health.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been relatively stable over the years. It increased from 2.32 in 2019 to 2.47 in 2023 with fluctuations in between. This indicates that ASGN Inc has a comfortable cushion of current assets to cover its current liabilities.

The quick ratio, also known as the acid-test ratio, is a more conservative measure of liquidity as it excludes inventory from current assets. ASGN Inc's quick ratio mirrors its current ratio, suggesting that the company has sufficient liquid assets to cover its short-term liabilities without relying on the sale of inventory.

The cash ratio reveals the proportion of cash and cash equivalents to current liabilities. ASGN Inc's cash ratio has shown a substantial increase from 0.38 in 2019 to 0.59 in 2023. This signifies an improvement in the company's ability to meet its short-term obligations with cash on hand, which is considered a positive sign of liquidity strength.

Overall, ASGN Inc's liquidity ratios demonstrate a solid financial position with a healthy ability to meet its short-term obligations. The increasing trend in the cash ratio is particularly notable, indicating improved liquidity management over the years.

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Additional liquidity measure

ASGN Inc's cash conversion cycle has exhibited fluctuations over the past five years. The company's cash conversion cycle was 56.90 days as of December 31, 2023, showing an improvement from 64.01 days in 2022 and 61.91 days in 2021. This indicates that the company has been able to efficiently manage its working capital and convert its investments into cash more quickly.

Comparing the current cash conversion cycle to 2020 and 2019, the trend shows a slightly longer cycle in 2020 at 57.63 days, and a comparable cycle in 2019 at 56.50 days. These fluctuations suggest that ASGN Inc has experienced variations in its operational efficiency and effectiveness in managing its receivables, inventory, and payables over the years.

Overall, while the cash conversion cycle has shown some variability, the recent improvement suggests that ASGN Inc has made strides in optimizing its cash flows and working capital management, contributing to potential enhancements in operational performance and financial stability.