DXC Technology Co (DXC)

Liquidity ratios

Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019
Current ratio 1.17 1.11 1.13 1.14 1.18 1.13 1.14 1.09 1.09 1.12 1.08 1.02 1.01 1.10 0.96 1.29 1.14 0.93 0.95 0.88
Quick ratio 1.02 0.97 0.96 0.96 1.02 0.90 0.98 0.94 0.95 0.98 0.96 0.88 0.87 0.97 0.84 1.17 1.02 0.82 0.83 0.76
Cash ratio 0.28 0.34 0.30 0.31 0.36 0.34 0.39 0.35 0.39 0.43 0.40 0.33 0.36 0.47 0.36 0.66 0.47 0.29 0.32 0.20

Based on the provided data, DXC Technology Co's liquidity ratios show fluctuations over the past few quarters.

The current ratio, which measures short-term liquidity by comparing current assets to current liabilities, has been around 1.1 to 1.2 in recent quarters, indicating that the company generally has sufficient current assets to cover its short-term obligations. However, there have been some fluctuations, with the ratio reaching as low as 0.88 in the fourth quarter of 2019.

The quick ratio, a stricter measure of liquidity that excludes inventory from current assets, has also shown variability, ranging from 0.84 to 1.17. This implies that the company may face some challenges in meeting its short-term obligations without relying on selling inventory.

The cash ratio, which focuses solely on the company's ability to cover its current liabilities with cash and cash equivalents, has fluctuated between 0.20 and 0.66. This indicates that DXC Technology Co may have challenges in covering its short-term obligations with its cash reserves alone.

Overall, while the current ratio suggests that the company has been able to meet its short-term obligations, the quick ratio and cash ratio indicate potential liquidity challenges. It would be prudent for management to closely monitor these ratios to ensure the company's liquidity position remains stable.

Additional liquidity measure

Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019
Cash conversion cycle days 63.51 74.70 80.37 83.46 82.08 94.96 77.31 82.19 81.95 77.12 78.91 81.90 82.04 78.70 71.25 69.05 68.31 65.94 59.94 59.05

The cash conversion cycle of DXC Technology Co has shown fluctuations over the past few quarters. A shorter cash conversion cycle indicates efficient management of working capital, while a longer cycle suggests potential issues in liquidity and inventory management.

From Mar 31, 2019 to Mar 31, 2024, the cash conversion cycle ranged from 59.05 days to 94.96 days, with the latest figure on March 31, 2024 being 63.51 days. This implies that the company takes approximately 63.51 days to convert its investments in inventory back into cash, indicating a relatively efficient process.

Despite some quarterly variations, there is a general decreasing trend in the cash conversion cycle over the period, which can be considered a positive signal. This trend suggests potential improvements in managing accounts receivable, inventory, and accounts payable to enhance cash flow efficiency.

Overall, DXC Technology Co has been working towards optimizing its cash conversion cycle, but a continued focus on further decreasing this cycle could lead to enhanced liquidity and financial performance in the future.