IQVIA Holdings Inc (IQV)

IQVIA Holdings Inc's liquidity ratios paint a mixed picture over the past five years. The current ratio, which measures the company's ability to meet short-term obligations with current assets, has shown a declining trend from 1.05 in 2019 to 0.86 in 2023. This indicates that the company's current assets may not be sufficient to cover its current liabilities.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, follows the same declining trend as the current ratio. The company's quick ratio has decreased from 1.05 in 2019 to 0.86 in 2023, suggesting a potential strain on its ability to meet immediate payment obligations without relying on inventory.

The cash ratio, which focuses solely on the most liquid current assets (cash and cash equivalents) to current liabilities, shows a fluctuating pattern over the years. While it increased to 0.58 in 2020, it dropped significantly to 0.34 in 2023. This implies that IQVIA Holdings Inc has a lower level of cash reserves relative to its current liabilities in recent years, potentially signaling a decreased ability to cover short-term obligations.

Overall, IQVIA Holdings Inc's liquidity ratios indicate a concerning trend of decreasing liquidity and potential challenges in meeting short-term obligations with its current asset base. It would be prudent for the company to closely monitor and manage its liquidity position to ensure financial stability and meet its obligations effectively.

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IQVIA Holdings Inc Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle of IQVIA Holdings Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle was 83.14 days, representing an increase from the previous year. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during the year.

Comparing to 2021, the company experienced the shortest cash conversion cycle of 68.64 days, suggesting that it managed its inventory and receivables efficiently to generate cash quickly. However, in 2020 and 2019, the cash conversion cycles were 79.24 days and 86.84 days, respectively, indicating longer periods for cash conversion.

Overall, fluctuations in the cash conversion cycle may reflect changes in inventory management, accounts receivable collection, and supplier payment practices. It is important for IQVIA Holdings Inc to consistently monitor and improve its cash conversion cycle to enhance liquidity and operational efficiency.