DXC Technology Co (DXC)

The liquidity ratios of DXC Technology Co show an improving trend over the five-year period from March 31, 2021, to March 31, 2025.

1. Current Ratio:
- The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has increased steadily from 1.01 in March 2021 to 1.22 in March 2025. This indicates that DXC Technology Co's short-term financial obligations are being better met by its current assets over the years.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a stricter measure of liquidity by excluding inventory from current assets. It has shown a positive trend, rising from 0.87 in March 2021 to 1.08 in March 2025. This suggests that the company has a sufficient amount of highly liquid assets to cover immediate liabilities.

3. Cash Ratio:
- The cash ratio, which specifically looks at the ability to cover short-term obligations with cash and cash equivalents, has fluctuated slightly but generally improved over the five-year period. It went from 0.36 in March 2021 to 0.41 in March 2025. This shows that DXC Technology Co has been gradually increasing its cash holdings relative to its short-term liabilities.

Overall, the increasing trend in all three liquidity ratios indicates that DXC Technology Co's liquidity position has strengthened over the years, reflecting a potentially healthier financial condition and improved ability to meet its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle (CCC) of DXC Technology Co has shown some fluctuations over the past five years. As of March 31, 2021, the CCC was 80.72 days, indicating that it took the company an average of 80.72 days to convert its resources into cash flow.

By March 31, 2022, the CCC slightly increased to 81.08 days, suggesting a minor slowdown in the conversion of resources into cash flow. However, in the following year, the CCC improved to 80.16 days, showing a better efficiency in managing cash flows.

The most significant change occurred by March 31, 2024, when the CCC dropped to 57.68 days. This substantial decrease indicates that the company was able to significantly speed up its cash conversion cycle, potentially through more efficient management of working capital.

By March 31, 2025, the CCC increased slightly to 63.77 days, indicating some lengthening of the cash conversion cycle compared to the previous year. Overall, the trend in the cash conversion cycle of DXC Technology Co shows some variability but also improvements in optimizing cash flow management over the five-year period.