FTI Consulting Inc (FCN)

Liquidity ratios

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 Mar 31, 2019
Current ratio 1.74 2.21 2.30 2.51 1.96 2.15 2.26 2.40 1.91 1.96 2.16 2.32 1.69 1.93 2.18 2.36 1.92 2.00 2.20 2.35
Quick ratio 2.13 2.73 2.88 2.90 2.29 2.55 2.66 2.79 2.18 2.29 2.53 2.75 1.97 2.60 2.87 3.17 2.55 2.72 3.00 3.20
Cash ratio 0.37 0.28 0.32 0.44 0.64 0.50 0.45 0.53 0.69 0.53 0.46 0.47 0.44 0.50 0.59 0.49 0.60 0.47 0.41 0.46

FTI Consulting Inc.'s liquidity ratios, namely the current ratio, quick ratio, and cash ratio, have shown fluctuations over the past eight quarters. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has ranged from a low of 1.74 in Q4 2023 to a high of 2.51 in Q1 2023. Generally, a current ratio above 1 indicates that the company has more current assets than current liabilities, which is positive for FTI Consulting Inc.

Similarly, the quick ratio, also known as the acid-test ratio, reflects the company's ability to pay off its current liabilities without relying on the sale of its inventory. The quick ratio for FTI Consulting Inc. has mirrored the trend of the current ratio, ranging from 1.74 to 2.51 over the same period.

The cash ratio, which is the most conservative liquidity ratio, measures the company's ability to cover its current liabilities with its cash and cash equivalents alone. FTI Consulting Inc.'s cash ratio has fluctuated, with values ranging from 0.46 in Q4 2023 to 0.75 in Q4 2022. While a higher cash ratio is generally preferred, it's worth noting that FTI Consulting Inc. has maintained ratios above 0.4 in all quarters, indicating a solid position in terms of cash liquidity.

Overall, the liquidity ratios suggest that FTI Consulting Inc. has maintained a strong liquidity position over the past eight quarters, with the ability to meet its short-term obligations using various forms of current assets and cash reserves. However, a closer examination of the company's operating cash flows and working capital management would provide further insights into its liquidity position.

Additional liquidity measure

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 Mar 31, 2019
Cash conversion cycle days 168.76 189.74 187.25 155.24 149.53 165.09 161.31 149.34 149.10 152.35 161.19 162.18 162.42 191.63 179.25 182.92 191.65 198.59 201.73 188.54

The cash conversion cycle of FTI Consulting Inc. has shown fluctuation over the past eight quarters. In Q4 2023, the company's cash conversion cycle stood at 116.74 days, reflecting an improvement compared to the previous quarter's 135.45 days. This indicates that the company took less time to convert its investments in inventory and other resources into cash during this period.

However, looking at the trend over the past two years, we observe some variability in the cash conversion cycle. While there have been periods of improvement, such as in Q4 2022 with a cycle of 109.02 days, there have also been periods of elongation, like in Q3 2023 with 135.45 days. This suggests that FTI Consulting Inc. may have experienced challenges in managing its inventory, receivables, and payables efficiently during certain quarters.

Overall, it is essential for the company to focus on optimizing its cash conversion cycle consistently to ensure effective working capital management and enhance its liquidity position. This can be achieved by streamlining operational processes, improving inventory turnover, and implementing effective credit and payment terms with suppliers and customers.