GE Vernova LLC (GEV)

Based on the provided data, the liquidity ratios of GE Vernova LLC indicate the company's ability to meet its short-term obligations.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, shows a slight improvement from 0.95 in 2022 to 1.08 in 2024. However, a current ratio below 1 may raise concerns about the company's ability to pay off its current liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. GE Vernova's quick ratio has shown an increase from 0.08 in 2022 to 0.23 in 2024. This improvement suggests a better ability to meet short-term obligations without relying on selling inventory.

The cash ratio, which is the most conservative liquidity ratio, measures the company's ability to pay off its current liabilities using only cash and cash equivalents. GE Vernova's cash ratio has also shown an increase from 0.08 in 2022 to 0.25 in 2024, indicating an enhanced capacity to settle short-term debts with available cash.

Overall, the trend in the liquidity ratios of GE Vernova LLC demonstrates a positive development in the company's ability to meet its short-term financial obligations over the years, with the cash ratio showing the most significant improvement. However, further analysis considering the industry benchmarks and specific business circumstances would provide a more comprehensive evaluation of the company's liquidity position.

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Additional liquidity measure

The cash conversion cycle of GE Vernova LLC has shown a significant increase from 0.00 days as of December 31, 2021, to 94.69 days as of December 31, 2022. This indicates a lengthening of the time it takes for the company to convert its investments in inventory into cash receipts from its sales.

Although there has been a slight decrease in the cash conversion cycle in subsequent years, with 92.93 days as of December 31, 2023, and 91.70 days as of December 31, 2024, the overall trend suggests that the company may be facing challenges in efficiently managing its working capital.

A higher cash conversion cycle can signal potential issues with inventory management, sales trends, or payment collection processes. GE Vernova LLC may need to assess its supply chain efficiency, inventory turnover rates, and credit policies to optimize its cash conversion cycle and enhance its liquidity position.