Gen Digital Inc. (GEN)

Liquidity ratios

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 0.51 0.35 0.32 0.30 0.51 0.67 0.44 0.40 0.43 0.48 0.57 0.62 0.74 0.75 0.69 0.80 0.72 1.01 1.03 0.77
Quick ratio 0.41 0.30 0.24 0.22 0.23 0.27 0.33 0.28 0.32 0.35 0.45 0.54 0.66 0.66 0.59 0.62 0.51 0.72 0.71 0.51
Cash ratio 0.35 0.23 0.19 0.17 0.17 0.19 0.26 0.23 0.26 0.28 0.39 0.49 0.62 0.62 0.55 0.56 0.45 0.59 0.60 0.44

Gen Digital Inc.'s liquidity ratios show mixed performance over the analyzed periods. The current ratio, which measures short-term liquidity by comparing current assets to current liabilities, has fluctuated between 0.30 and 1.03. Although the ratio dropped significantly in recent periods, indicating potential difficulties in meeting short-term obligations, it did show improvement in the latest quarter.

In contrast, the quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity. This ratio ranged from 0.22 to 0.72, displaying a consistent downward trend. The quick ratio suggests that Gen Digital Inc. may face challenges in meeting immediate payment needs without relying on inventory liquidation.

Lastly, the cash ratio, reflecting the proportion of cash and cash equivalents to current liabilities, varied between 0.17 and 0.62. This ratio decreased over time, reaching its lowest point in the most recent period. The decreasing trend highlights potential cash flow struggles and raises concerns about the company's ability to settle short-term obligations solely through cash reserves.

Overall, Gen Digital Inc. faces liquidity challenges as indicated by declining current, quick, and cash ratios over the analyzed periods. Management should closely monitor these ratios and implement strategies to improve liquidity and ensure the company's financial stability.

Additional liquidity measure

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days -23.90 -16.33 28.29 -20.75 -15.24 61.19 -5.08 -8.77 -9.15 114.33 -6.84 2.92 12.93 -5.50 -4.81 173.68 203.68 241.40 225.64 378.19

The cash conversion cycle of Gen Digital Inc. has shown fluctuations over the years.

- As of June 30, 2020, the company had a cash conversion cycle of 378.19 days, indicating a relatively long cycle for converting inventory into cash.
- By March 31, 2021, the cash conversion cycle decreased to 203.68 days, implying improvements in managing inventory, receivables, and payables.
- Notably, in September 30, 2021, and December 31, 2021, the company achieved negative cash conversion cycles of -4.81 and -5.50 days, respectively, suggesting a more efficient cash conversion process where payables are being settled faster than receivables are collected.
- However, the cash conversion cycle increased to 114.33 days by December 31, 2022, indicating potential delays in converting cash back into cashable resources.
- As of March 31, 2025, the company managed to reduce the cash conversion cycle to -23.90 days, reflecting a situation where the company is operating with negative working capital, potentially having more current liabilities than current assets, which may raise concerns about liquidity management.

Overall, fluctuations in the cash conversion cycle of Gen Digital Inc. suggest changing efficiency in managing its working capital components over the years. Further analysis is recommended to understand the factors driving these changes and their implications for the company's financial performance and liquidity position.