ASGN Inc (ASGN)

ASGN Inc's liquidity ratios have shown positive trends over the years based on the provided data.

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term liabilities with its current assets.
- ASGN Inc's current ratio has been consistently above 2.0 over the years, indicating a strong ability to meet its short-term obligations.
- The ratio increased from 2.39 in 2020 to 2.50 in 2024, reflecting an improvement in the company's liquidity position.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets.
- ASGN Inc's quick ratio has also been robust, staying above 2.0 during the period under consideration.
- The ratio ranged from 2.09 in 2022 to 2.75 in 2021, suggesting the company's ability to meet its short-term obligations without relying on inventory.

3. Cash Ratio:
- The cash ratio measures the company's ability to cover its current liabilities with its cash and cash equivalents.
- ASGN Inc's cash ratio has shown fluctuations over the years but generally remained at reasonable levels.
- The ratio improved from 0.66 in 2020 to 0.56 in 2024, indicating an enhanced ability to pay off short-term debts using cash reserves.

Overall, ASGN Inc's liquidity ratios demonstrate a healthy liquidity position, with both the current and quick ratios consistently above 2.0, indicating a strong ability to meet short-term obligations. The cash ratio also shows a reasonable level of cash availability to cover current liabilities.

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Additional liquidity measure

The cash conversion cycle of ASGN Inc has shown some fluctuations over the past few years. From December 31, 2020, to December 31, 2021, the cash conversion cycle increased from 60.68 days to 67.16 days, indicating a longer time period required to convert investments in inventory and accounts receivable into cash.

In the subsequent years, there was a further increase in the cash conversion cycle, reaching 68.54 days by December 31, 2022, and peaking at 83.58 days by December 31, 2023. The significant increase during this period suggests potential challenges in efficiently managing the company's working capital, potentially leading to a higher investment in inventory or delays in collecting receivables.

However, by December 31, 2024, there was a notable improvement in the cash conversion cycle, decreasing to 54.54 days. This improvement could indicate better inventory management or more effective accounts receivable collection processes, resulting in a shorter period to convert investments into cash.

Overall, the fluctuations in the cash conversion cycle of ASGN Inc highlight the importance of closely monitoring working capital efficiency to optimize cash flow management and operational performance.