Concentrix Corporation (CNXC)

Concentrix Corporation's liquidity ratios show a fluctuating trend over the periods analyzed. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has varied between 1.38 and 3.54. While a current ratio above 1 indicates the company can cover its short-term liabilities, the significant increase to 3.54 on August 31, 2023, may suggest an excess of current assets relative to current liabilities, which could potentially signal inefficient asset management.

The quick ratio, which reflects the company's ability to pay off its current liabilities without relying on inventory, has similarly fluctuated, ranging from 1.05 to 3.34. A quick ratio above 1 indicates good liquidity, and Concentrix has generally maintained levels above this benchmark. The sharp increase on August 31, 2023, to 3.34 may indicate a strong ability to cover short-term liabilities without relying on inventory.

Lastly, the cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has ranged from 0.12 to 2.02. The cash ratio provides insight into a company's ability to withstand financial difficulties in the short term, and Concentrix has mostly maintained ratios above 1, except for November 30, 2021. The significant increase to 2.02 on August 31, 2023, suggests a strong cash position relative to current liabilities during that period.

Overall, while Concentrix's liquidity ratios have exhibited fluctuations, the company generally shows a solid ability to meet short-term obligations and has improved its liquidity position over the periods analyzed. However, it may be important for stakeholders to monitor these ratios closely to ensure ongoing financial health and efficiency in managing short-term liquidity needs.

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Additional liquidity measure

The cash conversion cycle of Concentrix Corporation has shown fluctuations over the period from November 30, 2021, to February 28, 2025. The cycle represents the time taken by the company to convert its investments in inventory and other resources into cash inflows from sales.

Initially, the cash conversion cycle started at 65.86 days on November 30, 2021, and peaked at 95.10 days on November 30, 2023. This increase in the cycle duration may suggest potential liquidity issues or inefficiencies in managing working capital during that period.

Following the peak, there was a noticeable decline in the cash conversion cycle, reaching relatively low levels of 62.29 days on August 31, 2024, and 67.62 days on February 28, 2025. This improvement indicates that Concentrix Corporation managed its working capital more effectively, resulting in a shorter time span to convert investments into cash.

Overall, the trend in the cash conversion cycle of Concentrix Corporation reflects fluctuations but also demonstrates the company's ability to adapt and enhance its working capital management practices over time. Further analysis and comparison with industry benchmarks would provide deeper insights into the company's efficiency in managing its cash flow and working capital.