Ingersoll Rand Inc (IR)

Ingersoll Rand Inc's liquidity ratios show a varying trend over the years. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has generally been above 2, indicating a healthy liquidity position. However, there was a slight decrease in the current ratio from 2.80 in 2021 to 2.29 in 2024.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Despite fluctuations, Ingersoll Rand Inc has generally maintained a quick ratio above 1, suggesting the company can meet its short-term obligations without relying on the sale of inventory.

The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, exhibited a declining trend from 1.44 in 2021 to 0.85 in 2024. This indicates a decrease in the company's ability to cover its current liabilities solely with its readily available cash resources.

Overall, while Ingersoll Rand Inc has shown strong liquidity positions based on the current and quick ratios, the declining trend in the cash ratio may warrant further investigation into the company's cash management practices and potential liquidity risks in the future.

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Additional liquidity measure

The cash conversion cycle of Ingersoll Rand Inc has shown a fluctuating trend over the past five years. Starting at 114.42 days on December 31, 2020, the company's cash conversion cycle decreased to 88.39 days by December 31, 2021, indicating an improvement in its efficiency in converting its investments in inventory and receivables into cash.

However, the trend reversed slightly in the following year, with the cash conversion cycle increasing to 94.30 days by December 31, 2022. This suggests that the company took longer to convert its resources back into cash, potentially impacting its liquidity position.

Nonetheless, Ingersoll Rand Inc managed to reduce its cash conversion cycle significantly by December 31, 2023, to 83.78 days, indicating a more efficient management of working capital and faster cash conversion processes.

As of December 31, 2024, the cash conversion cycle stood at 86.35 days, showing a slight increase compared to the previous year but still indicating a relatively efficient cash conversion process.

Overall, fluctuations in Ingersoll Rand Inc's cash conversion cycle over the five-year period indicate varying levels of efficiency in managing its working capital and liquidity. The company should continue monitoring and optimizing its cash conversion cycle to ensure consistent and optimal use of its resources.