Interpublic Group of Companies Inc (IPG)

Liquidity ratios

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio 1.09 1.06 1.03 1.03 0.98
Quick ratio 0.22 0.23 0.25 0.30 0.26
Cash ratio 0.22 0.23 0.25 0.30 0.26

Interpublic Group of Companies Inc's liquidity ratios have shown some improvement over the years based on the provided data.

1. Current Ratio: The company's current ratio has been gradually increasing from 0.98 in December 2020 to 1.09 in December 2024. This indicates that the company's ability to meet its short-term obligations with its current assets has strengthened over time.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, measures the company's ability to pay off its current liabilities without relying on inventory. Despite some fluctuations, the quick ratio has remained relatively stable ranging from 0.22 to 0.30 between December 2020 and December 2024. This suggests that Interpublic Group has maintained a reasonable level of liquidity to cover immediate obligations.

3. Cash Ratio: The cash ratio, which focuses solely on cash and cash equivalents compared to current liabilities, has also shown consistency over the years, varying from 0.22 to 0.30 during the same period. This indicates that the company has a healthy amount of cash on hand relative to its short-term liabilities.

Overall, Interpublic Group of Companies Inc's liquidity ratios demonstrate a strengthening financial position in terms of its ability to meet short-term obligations, manage liquidity effectively, and maintain adequate cash reserves over the years, which is a positive indicator for investors and stakeholders.


Additional liquidity measure

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash conversion cycle days 0.00 118.75 0.24 0.36 0.04

The cash conversion cycle (CCC) of Interpublic Group of Companies Inc has shown fluctuation over the years.

As of December 31, 2020, the company had an extremely efficient CCC of 0.04 days, indicating that it converted its investments in inventory and accounts receivable to cash very quickly. This was a positive sign of effective working capital management.

In December 31, 2021, the CCC increased to 0.36 days, suggesting a slight delay in converting its resources into cash compared to the previous year. However, the CCC remained relatively low, indicating efficient operations.

By December 31, 2022, the CCC decreased to 0.24 days, showing improved efficiency in managing cash flows and working capital.

The next year, on December 31, 2023, there was a significant spike in the CCC to 118.75 days. This significant increase may indicate challenges in managing working capital effectively, leading to a delay in converting investments into cash.

Finally, by December 31, 2024, the CCC dropped back to 0.00 days, which could suggest that the company managed to rectify the issues observed in the previous year and achieve a more efficient cash conversion process.

Overall, the trend in Interpublic Group of Companies Inc's cash conversion cycle shows some fluctuations, with the company demonstrating both strengths and areas for improvement in managing its working capital effectively. Further analysis and investigation into the reasons behind the fluctuations may provide important insights into the company's financial performance and operational efficiency.