Genpact Limited (G)

Genpact Limited has shown stability and improvement in its liquidity position over the years based on its key liquidity ratios. The current ratio has increased from 1.45 in 2020 to 2.16 in 2024, indicating the company's ability to cover its short-term obligations with its current assets has significantly strengthened. The trend suggests that Genpact has a comfortable level of current assets relative to its current liabilities.

Similarly, the quick ratio, which excludes inventory from current assets, has also shown an increasing trend from 1.30 in 2020 to 1.94 in 2024. This reveals that the company has a strong ability to meet its short-term obligations using the most liquid assets at its disposal, excluding inventory.

Furthermore, the cash ratio, a more stringent measure of liquidity, has fluctuated but generally improved from 0.57 in 2020 to 0.70 in 2024. This indicates that Genpact has a more conservative approach to liquidity, with an increasing ability to cover its current liabilities using only its cash and cash equivalents.

Overall, Genpact Limited's liquidity ratios demonstrate a positive liquidity position with a strengthening ability to meet its short-term obligations and manage potential liquidity risks effectively over the years.

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Additional liquidity measure

The cash conversion cycle of Genpact Limited has exhibited fluctuations over the years. As of December 31, 2020, the company's cash conversion cycle stood at 84.85 days, indicating the average time it takes for the company to convert its investments in inventory and other resources into cash inflows.

There was a slight improvement in efficiency as the cash conversion cycle decreased to 77.29 days by December 31, 2021. This suggests that Genpact was able to manage its working capital more effectively, leading to a shorter time between spending cash on production inputs and receiving cash from sales.

However, by the end of December 31, 2022, the cash conversion cycle increased slightly to 78.73 days, indicating a longer cycle compared to the previous year. This could be attributed to factors such as changes in inventory management or payment terms with customers and suppliers.

The cycle extended further to 87.94 days by December 31, 2023, signifying a potential delay in the company's cash conversion processes. This could impact the company's liquidity and working capital management if not addressed promptly.

By December 31, 2024, the cash conversion cycle remained high at 87.69 days, showing that Genpact may be facing challenges in efficiently managing its working capital and cash flows.

Overall, it is essential for Genpact Limited to continuously monitor and optimize its cash conversion cycle to ensure efficient use of resources, maintain liquidity, and support sustainable business operations.