IAC Inc. (IAC)

Looking at IAC Inc.'s liquidity ratios over the past four years, we can observe a general downward trend in both the current ratio and quick ratio, while the cash ratio has also decreased significantly.

Starting with the current ratio, which measures the company's ability to cover its short-term obligations with its current assets, we see a slight fluctuation but overall a healthy range above 1. A current ratio of 2.36 in 2023 indicates that IAC Inc. had $2.36 in current assets for every $1 in current liabilities, which suggests a strong liquidity position.

Similarly, the quick ratio, which provides a more stringent measure by excluding inventory from current assets, also shows a decreasing trend but remains above 1 for all years. A quick ratio of 2.09 in 2023 implies that the company had $2.09 in liquid assets to cover each $1 of current liabilities, indicating a satisfactory ability to meet short-term obligations.

On the other hand, the cash ratio, which is the most conservative liquidity measure, shows a noticeable drop from 4.78 in 2020 to 1.52 in 2023. A cash ratio of 1.52 means that IAC Inc. had $1.52 in cash and cash equivalents for every $1 of current liabilities. While this ratio has decreased over the years, it still indicates a reasonable capacity to cover short-term obligations with readily available cash.

Overall, while there has been a decline in IAC Inc.'s liquidity ratios over the past four years, the company still maintains strong liquidity positions based on the current ratio, quick ratio, and cash ratio. However, the downward trend in these ratios should be monitored closely to ensure adequate liquidity management in the future.

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Additional liquidity measure

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that the company is able to efficiently manage its working capital and convert its resources into cash quickly.

Analyzing the trend in IAC Inc.'s cash conversion cycle over the past four years, we observe the following:
1. In 2023, the cash conversion cycle increased to 36.16 days from 33.65 days in 2022. This suggests that the company took slightly longer to convert its resources into cash in 2023 compared to the previous year.
2. In 2022, the cash conversion cycle decreased to 33.65 days from 51.12 days in 2021. This significant decrease indicates that the company improved its working capital management and became more efficient in converting its resources into cash in 2022.
3. In 2021, the cash conversion cycle was 51.12 days, indicating that the company took more time to convert its investments into cash compared to the negative cash conversion cycle of -5.44 days in 2020.
4. The negative cash conversion cycle in 2020 suggests that IAC Inc. was very efficient in managing its working capital, taking less time to convert investments into cash than the typical operating cycle.

Overall, IAC Inc. has experienced fluctuations in its cash conversion cycle over the past four years, with some improvements in efficiency observed in certain years. It is important for the company to continue monitoring and managing its working capital effectively to ensure optimal cash flow management.