Genpact Limited (G)

Genpact Ltd's liquidity ratios indicate the company's ability to meet its short-term obligations. Looking at the current ratio, which compares current assets to current liabilities, we observe a downward trend from 2019 to 2023, starting at 1.70 and decreasing to 1.44. This pattern suggests a slight decline in the company's short-term liquidity position.

The quick ratio, which excludes inventory from current assets, also shows a similar trend as the current ratio, with a decrease from 1.70 in 2019 to 1.44 in 2023. This indicates that Genpact's ability to meet its short-term obligations without relying on inventory has slightly weakened over the years.

Examining the cash ratio, which assesses the company's immediate ability to repay its current liabilities with cash and cash equivalents, we notice fluctuations over the five-year period. The cash ratio dipped to its lowest point in 2023 at 0.59, implying that Genpact had a lower proportion of cash reserves relative to its current liabilities.

Overall, the liquidity ratios of Genpact Ltd suggest a moderate decline in short-term liquidity position over the past five years, raising a concern about the company's ability to meet its immediate financial obligations. Further analysis and monitoring of the company's cash management practices and working capital efficiency may be necessary to address these liquidity challenges.

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Additional liquidity measure

The cash conversion cycle of Genpact Ltd has shown fluctuating trends over the past five years. In 2023, the company's cash conversion cycle increased to 87.53 days compared to the previous year, indicating a potential inefficiency in converting its investments in raw materials and other inputs into cash receipts from sales. However, it is worth noting that the 2023 cycle is still lower than the cycle in 2019, suggesting some improvement in managing working capital.

Over the five-year period, Genpact Ltd has experienced variations in its cash conversion cycle, with the lowest cycle of 77.04 days in 2021 and the highest cycle of 91.29 days in 2019. These fluctuations may be influenced by factors such as inventory management, accounts receivable collection, and accounts payable payment practices.

Analyzing the cash conversion cycle can provide insights into the company's operational efficiency and liquidity management. A shorter cycle indicates that the company is able to quickly convert its investments into cash, which may signal effective working capital management. Conversely, a longer cycle may point to inefficiencies in the company's operations, possibly leading to cash flow challenges.

In conclusion, Genpact Ltd should continue monitoring and analyzing its cash conversion cycle to identify areas for improvement in managing working capital effectively and enhancing overall operational efficiency.