Equifax Inc (EFX)

Equifax Inc's liquidity ratios indicate the company's ability to meet short-term obligations.

1. Current Ratio: This ratio measures the company's ability to cover its short-term liabilities with its short-term assets. Equifax's current ratio has fluctuated over the years but has generally remained below 1, indicating that the company may have difficulties in meeting its current obligations with its current assets alone.

2. Quick Ratio: Also known as the acid-test ratio, this ratio provides a more stringent measure of liquidity by excluding inventory from current assets. Equifax's quick ratio has been low, particularly in 2021 and 2024, indicating that the company may struggle to meet its short-term obligations with its most liquid assets.

3. Cash Ratio: The cash ratio is an even more stringent measure of liquidity as it only considers cash and cash equivalents to cover current liabilities. Equifax's cash ratio has also been quite low, falling below 1 in most years, implying that the company may have limited cash reserves to meet immediate obligations.

Overall, based on these liquidity ratios, Equifax Inc may need to focus on improving its liquidity position to ensure it can readily meet its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle for Equifax Inc has shown a fluctuating trend over the past few years. In 2020, the company's cash conversion cycle was 21.87 days, which decreased to 19.97 days by the end of 2021, indicating an improvement in the company's efficiency in managing its working capital.

However, by the end of 2022, the cash conversion cycle increased to 22.51 days, suggesting a slight slowdown in the company's ability to convert its investments in inventory and accounts receivable into cash. Furthermore, in 2023 and 2024, the cash conversion cycle dropped to 0.00 days, which may be unusual and could potentially indicate an anomaly in the data for those years.

Overall, Equifax Inc should continue to monitor its cash conversion cycle closely to ensure efficient management of its working capital and strive for consistency in converting its operating assets into cash inflows.