Heidrick & Struggles International (HSII)

Heidrick & Struggles International, Inc. has displayed consistent liquidity levels over the past five years based on the liquidity ratios analyzed.

1. Current Ratio:
The current ratio measures the company's ability to cover its short-term liabilities with its current assets. Heidrick & Struggles' current ratio has shown a generally increasing trend from 2019 to 2023, ranging from 1.39 to 1.58. This indicates that the company has a sufficient level of current assets to cover its current liabilities.

2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity, excluding inventory from current assets. The quick ratio for Heidrick & Struggles has remained consistent at 1.40 to 1.58 over the five-year period, indicating the company's ability to meet its short-term obligations with its most liquid assets.

3. Cash Ratio:
The cash ratio specifically focuses on the company's ability to cover its current liabilities with its cash and cash equivalents. Heidrick & Struggles' cash ratio has also shown a generally increasing trend from 2019 to 2023, ranging from 1.10 to 1.25. This suggests that the company holds an increasing level of cash compared to its current liabilities.

Overall, the liquidity ratios of Heidrick & Struggles International, Inc. indicate a stable and sound liquidity position, with improvements in certain ratios over the period analyzed. The company seems well-positioned to meet its short-term obligations and maintain financial stability.

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Additional liquidity measure

The cash conversion cycle for Heidrick & Struggles International, Inc. has shown significant fluctuations over the past five years. In 2023, the company has achieved a notably improved cash conversion cycle of -19.43 days, indicating a more efficient management of cash flow and working capital compared to the previous year. This improvement may suggest effective inventory management, quicker receivables collection, and extended payables payment periods.

In contrast, the company experienced a much longer cash conversion cycle in 2021, with a figure of -91.31 days. This negative value implies that the company was able to convert its inventory into cash and collect receivables more swiftly than paying its payables. However, such a prolonged cycle may also indicate potential issues in managing working capital effectively or an inefficient cash flow process during that period.

Furthermore, the positive cash conversion cycles in 2020 and 2019 (both above 50 days) suggest that the company took more time to convert its investments in inventory and accounts receivable into cash despite delaying payments to suppliers. This could have been influenced by various factors such as economic conditions, industry trends, or company-specific operational challenges.

Overall, the trend in Heidrick & Struggles' cash conversion cycle indicates fluctuations in the efficiency of its working capital management over the years, with the most recent data reflecting a more favorable position in terms of cash flow and operational liquidity.