Genpact Limited (G)

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 1.44 1.91 1.88 1.84 1.61 1.08 1.58 1.43 1.47 1.58 1.52 2.03 1.45 1.64 1.49 1.57 1.70 1.46 1.46 1.38
Quick ratio 1.29 1.64 1.62 1.66 1.50 0.93 1.36 1.33 1.37 1.43 1.35 1.83 1.31 1.45 1.36 1.40 1.52 1.25 1.24 1.16
Cash ratio 0.44 0.56 0.53 0.59 0.59 0.32 0.43 0.63 0.69 0.71 0.61 0.77 0.57 0.70 0.68 0.43 0.52 0.43 0.38 0.32

The current ratio for Genpact Ltd has shown a general upward trend over the past eight quarters, indicating that the company's ability to meet its short-term obligations with its current assets has been improving. The ratio has increased from 1.08 in Q3 2022 to 1.91 in Q3 2023, showing a significant improvement in liquidity. This suggests that Genpact has strengthened its position in terms of short-term financial health.

Similarly, the quick ratio has followed a similar trend, also showcasing an increase in liquidity from 1.07 in Q3 2022 to 1.91 in Q3 2023. The quick ratio excludes inventory from current assets, focusing on the most liquid assets, such as cash and accounts receivable. The improvement in the quick ratio further supports the idea that Genpact has enhanced its ability to meet immediate financial obligations without relying on inventory sales.

However, when looking at the cash ratio, which specifically measures the company's ability to cover its short-term liabilities with cash and cash equivalents, there is a slight fluctuation in the data. The ratio has shown some variability over the quarters, with an overall increase from 0.46 in Q3 2022 to 0.83 in Q3 2023. While the cash ratio's improvement indicates a stronger position in terms of pure cash liquidity, fluctuations in this ratio should be closely monitored to assess Genpact's ability to cover short-term obligations solely with cash reserves.

Overall, Genpact Ltd's liquidity ratios, including the current ratio, quick ratio, and cash ratio, have generally improved over the past year, indicating better short-term financial health and the company's ability to meet its current liabilities.

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 87.94 83.86 105.81 80.94 78.73 107.43 113.99 100.09 77.29 110.63 111.82 105.58 107.51 108.38 106.46 104.69 111.00 119.91 122.53 123.14

The cash conversion cycle of Genpact Ltd has exhibited some fluctuations over the past eight quarters. It measures the time it takes for the company to convert its investments in inventory and accounts receivable into cash inflows from sales.

In Q4 2023, the cash conversion cycle increased to 87.53 days compared to the prior quarter, indicating a potential delay in converting inventory and receivables into cash. However, it is still lower than the Q2 2023 value of 78.09 days.

Throughout 2022 and 2023, the cash conversion cycle generally ranged between 78 to 84 days, displaying some level of stability. Q3 and Q4 of 2022 showed slight increases, while Q1 and Q2 of 2023 saw improvements in the cycle.

It is crucial for Genpact Ltd to closely monitor and manage its cash conversion cycle to optimize working capital efficiency. A shorter cycle indicates the company is effectively managing its inventory and accounts receivable, leading to quicker cash generation. Continued analysis and strategic adjustments may be necessary to maintain or further improve the cash conversion cycle in the future.