Kelly Services A Inc (KELYA)

Based on the liquidity ratios of Kelly Services A Inc over the years, we observe the following trends:

1. Current Ratio:
- The current ratio has fluctuated over the years, starting at 1.67 in December 2020 and decreasing to 1.45 by December 2021. Subsequently, it increased to 1.52 in 2022 before declining slightly to 1.59 in 2023 and then edging up to 1.65 in 2024.
- Generally, a current ratio above 1 indicates that the company has more current assets than current liabilities, suggesting a healthy liquidity position. Although the ratio decreased in 2021, the subsequent increase indicates an improvement in the company's ability to meet its short-term obligations.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, measures the company's ability to meet short-term obligations with its most liquid assets. The ratio started at 1.79 in December 2020, declined to 1.64 in 2021, further decreased to 1.46 in 2022, and then dropped notably to 1.26 in 2023 before recovering slightly to 1.57 in 2024.
- A quick ratio above 1 signifies that the company can cover its short-term liabilities without relying heavily on inventory. The declining trend until 2023 raises a concern about the company's liquidity, but the improvement in 2024 indicates a positive sign.

3. Cash Ratio:
- The cash ratio, the most stringent liquidity measure, represents the proportion of a company's current assets held in cash or cash equivalents. The cash ratio for Kelly Services A Inc started at 0.42 in December 2020, decreased to 0.34 in 2021, further declined to 0.14 in 2022, and then dropped to 0.12 in 2023 and 0.05 in 2024.
- A cash ratio below 1 suggests that the company may have difficulty in meeting its short-term obligations using only cash resources. The consistent decline in the cash ratio indicates a decreasing ability to cover immediate liabilities with cash holdings.

In summary, the current ratio shows a relatively stable liquidity position for Kelly Services A Inc, while the quick ratio and cash ratio exhibit downward trends, indicating potential challenges in meeting short-term obligations with liquid assets. Management should monitor these ratios closely to ensure adequate liquidity levels for operational needs.

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Additional liquidity measure

Kelly Services A Inc's cash conversion cycle, a measure of how efficiently the company manages its working capital, has fluctuated over the past five years.

As of December 31, 2020, the company's cash conversion cycle stood at 102.47 days, indicating that it took approximately 102 days to convert its investments in inventory and receivables into cash flows.

By December 31, 2021, the cash conversion cycle had increased to 105.89 days, suggesting that the company took slightly longer to convert its working capital into cash during that period.

However, by December 31, 2022, the cash conversion cycle further extended to 110.01 days, signifying potential inefficiencies in managing its working capital.

The trend changed by December 31, 2023, as the cash conversion cycle decreased significantly to 87.63 days, indicating an improvement in the efficiency of converting working capital into cash.

Nonetheless, by December 31, 2024, the cycle increased again to 105.64 days, suggesting a regression in the company's management of working capital efficiency.

Overall, Kelly Services A Inc's cash conversion cycle has shown variability over the past five years, with fluctuations likely influenced by the company's management of inventory, accounts receivable, and accounts payable.