IQVIA Holdings Inc (IQV)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.84 | 0.86 | 0.89 | 0.91 | 1.12 |
| Quick ratio | 0.73 | 0.75 | 0.76 | 0.77 | 0.95 |
| Cash ratio | 0.26 | 0.23 | 0.23 | 0.28 | 0.42 |
IQVIA Holdings Inc's liquidity ratios have shown a declining trend over the past five years.
The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, decreased from 1.12 in 2020 to 0.84 in 2024. This suggests a weakening liquidity position as the current assets may not be sufficient to meet the current liabilities.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibited a downward trajectory from 0.95 in 2020 to 0.73 in 2024. This indicates a decreasing ability to meet short-term obligations without relying on inventory.
Furthermore, the cash ratio, which indicates the company's ability to cover its current liabilities with cash and cash equivalents only, decreased from 0.42 in 2020 to 0.26 in 2024. This shows a reduction in the company's immediate liquidity strength.
Overall, the declining trend in all three liquidity ratios suggests that IQVIA Holdings Inc may face challenges in meeting its short-term obligations with the available liquid assets alone. This could potentially indicate a need for improved liquidity management or a review of current asset allocation strategies.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 75.92 | 86.25 | 80.46 | 73.74 | 85.97 |
The cash conversion cycle of IQVIA Holdings Inc has shown fluctuations over the last five years. As of December 31, 2020, the company's cash conversion cycle was 85.97 days, indicating that it took approximately 85.97 days for the company to convert its investments in inventory and accounts receivable into cash.
By the end of December 31, 2021, the cash conversion cycle had improved to 73.74 days, reflecting a reduction in the time taken for the company to convert its resources into cash. This trend continued into December 31, 2022, with the cash conversion cycle further decreasing to 80.46 days.
However, there was a slight increase in the cash conversion cycle by December 31, 2023, reaching 86.25 days, suggesting a potential delay in the company's cash conversion process. Nonetheless, IQVIA Holdings Inc managed to reduce its cash conversion cycle by the end of December 31, 2024, to 75.92 days, indicating a more efficient management of working capital during that period.
Overall, while the company's cash conversion cycle experienced fluctuations over the years, the general trend showed some improvement in the efficiency of the company's cash management.