FTI Consulting Inc (FCN)

FTI Consulting Inc's liquidity ratios have shown a mixed trend over the past five years. The current ratio, which indicates the company's ability to cover its short-term obligations with its current assets, has generally improved from 1.69 in 2020 to 1.95 in 2024. This suggests that FTI Consulting's liquidity position has strengthened over the years.

On the other hand, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has been more volatile, decreasing to 0.37 in 2023 before rebounding to 0.71 in 2024. This indicates that the company may have faced challenges in quickly covering its short-term liabilities in 2023 but has since improved its ability to do so.

The cash ratio, which assesses the company's ability to cover its current liabilities with its cash and cash equivalents, has mirrored the trend of the quick ratio, showing similar fluctuations over the years.

Overall, FTI Consulting Inc's liquidity ratios demonstrate a generally positive liquidity position, with improvements in the current ratio suggesting better short-term solvency. However, the volatility in the quick and cash ratios indicates the need for careful management of liquid assets to ensure the company can meet its short-term obligations efficiently.

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Additional liquidity measure

The cash conversion cycle of FTI Consulting Inc has shown fluctuations over the years as per the provided data. In 2020, the company had a cash conversion cycle of 12.77 days, which decreased to 11.43 days in 2021. There was a significant improvement in 2022 and 2024, as the cash conversion cycle decreased to 0.00 days in both years. However, in 2023, there was a slight increase to 7.93 days.

A decreasing cash conversion cycle indicates that the company is more efficient in converting its inventory and receivables into cash, which is generally a positive sign. The significant improvements in 2022 and 2024 suggest that FTI Consulting Inc has been able to manage its working capital more effectively during those years. However, the slight increase in 2023 may require further analysis to understand the factors contributing to this change.

Overall, the trend in the cash conversion cycle of FTI Consulting Inc shows variations over the years, and the company's management should monitor and address any fluctuations to ensure optimal working capital management.