Kyndryl Holdings Inc (KD)

The liquidity ratios of Kyndryl Holdings Inc have shown varying trends over the reporting periods. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, improved from 0.73 as of December 31, 2020, to a peak of 1.30 as of December 31, 2021 before fluctuating around 1.00 in subsequent periods, except for a sharp drop to 0.38 as of March 31, 2023. This indicates that the company's short-term liquidity position has generally been strong, although there was a significant dip in the first quarter of 2023.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also showed fluctuations but generally improved from 0.38 as of December 31, 2020, to a peak of 1.01 as of December 31, 2021. The ratio then hovered around 0.60 in subsequent periods, with a peak of 0.73 as of March 31, 2025. This suggests that the company may have had some challenges in quickly covering its short-term obligations without relying on inventory, but the ratio improved towards the later periods.

The cash ratio, which indicates the extent to which cash and cash equivalents cover current liabilities, started at a very low 0.01 as of December 31, 2020, but increased significantly to 0.50 as of December 31, 2021, and also showed variations in subsequent periods, reaching a high of 15.70 as of March 31, 2025. This indicates that the company significantly improved its cash position over time, which could enhance its ability to meet short-term obligations using highly liquid assets.

Overall, while there were fluctuations in the liquidity ratios of Kyndryl Holdings Inc over the reporting periods, the company generally maintained a strong liquidity position, especially in terms of its ability to cover short-term obligations with current assets and cash equivalents.

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Additional liquidity measure

The cash conversion cycle of Kyndryl Holdings Inc has shown some fluctuations over the reporting periods provided in the data. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Based on the data, we observe the following trends in Kyndryl's cash conversion cycle:

1. In December 2020, the cash conversion cycle was relatively high at 37.06 days, indicating that the company took longer to convert its resources into cash.

2. There was a significant improvement in the cash conversion cycle in the subsequent period, March 2021, which decreased to 13.43 days. This suggests that Kyndryl was able to improve its efficiency in converting assets into cash during this period.

3. From June 2022 to September 2024, the cash conversion cycle fluctuated within a range of negative and positive days. Negative days indicate that the company was efficient in converting resources into cash faster than the corresponding sales cycle.

4. Notably, in March 2023, Kyndryl reported a negative cash conversion cycle of -12.01 days, implying that the company was able to convert its resources into cash before the sales cycle was completed.

Overall, the trends in Kyndryl's cash conversion cycle suggest varying levels of efficiency in managing working capital and converting assets into cash over the reporting periods. Investors and stakeholders may monitor these trends to assess the company's operational efficiency and liquidity management.