EPAM Systems Inc (EPAM)

EPAM Systems Inc has consistently demonstrated strong liquidity positions over the past five years as evidenced by its current, quick, and cash ratios.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has shown a positive trend, increasing from 3.81 in 2019 to 4.79 in 2023. This indicates that EPAM Systems has more than enough current assets to cover its current liabilities, suggesting a healthy liquidity position.

Similarly, the quick ratio, which is a more conservative measure of liquidity that excludes inventory from current assets, has followed the same increasing trend as the current ratio, reaching 4.79 in 2023. This shows that the company has a strong ability to meet its short-term obligations with its most liquid assets.

The cash ratio, which provides the most stringent measure of liquidity by only considering cash and cash equivalents to cover current liabilities, has also improved over the period, from 2.52 in 2019 to 3.40 in 2023. This indicates that EPAM Systems has a solid cash position relative to its short-term obligations.

Overall, EPAM Systems Inc's liquidity ratios reflect a consistent and robust liquidity position, with ample current assets, liquid assets, and cash reserves to meet its short-term obligations comfortably.

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Additional liquidity measure

The cash conversion cycle of EPAM Systems Inc has shown fluctuating trends over the past five years. The company's cash conversion cycle decreased from 77.28 days in 2019 to 66.22 days in 2023, indicating faster conversion of inventory and receivables into cash during this period. However, there was a slight increase in the cash conversion cycle in 2022 and 2021 compared to the previous year.

A lower cash conversion cycle suggests that the company is efficiently managing its working capital, converting investments in inventory and receivables into cash more quickly. This can be a positive indicator of operational efficiency and effective management of liquidity. Conversely, a higher cash conversion cycle may imply inefficiencies in managing working capital, leading to longer cash cycles and potential liquidity challenges.

Overall, while there have been fluctuations in the cash conversion cycle of EPAM Systems Inc over the years, the general trend appears to show improvement in working capital management and cash conversion efficiency. It would be important for the company to continue monitoring and optimizing its cash conversion cycle to maintain healthy liquidity and operational performance.