Leidos Holdings Inc (LDOS)

Leidos Holdings Inc's liquidity ratios have shown some fluctuations over the past five years. The current ratio, which indicates the company's ability to cover short-term obligations with its current assets, increased from 0.92 in 2022 to 1.34 in 2023. This suggests an improvement in the company's short-term liquidity position. However, the current ratio was higher in 2019 and 2020, indicating a potential decline in liquidity during those years.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also showed improvement from 0.73 in 2022 to 1.07 in 2023. This indicates that Leidos Holdings Inc may have a better ability to cover its short-term liabilities without relying on slower-moving inventory. Again, the quick ratio was higher in 2019 and 2020, implying that the company had stronger liquidity in those years.

The cash ratio, which measures a company's ability to cover short-term liabilities with its cash and cash equivalents, improved significantly from 0.13 in 2022 to 0.26 in 2023. This suggests that Leidos Holdings Inc has increased its cash reserves relative to its short-term obligations. However, the cash ratio was higher in 2019, indicating that the company had a stronger cash position back then.

Overall, the improving trend in the current, quick, and cash ratios from 2022 to 2023 is a positive sign for Leidos Holdings Inc's liquidity position. However, the ratios were higher in 2019 and 2020, indicating that the company may have had stronger liquidity in those years. Further analysis of the company's cash management strategies and working capital efficiency may provide additional insights into its liquidity management.

---

Additional liquidity measure

The cash conversion cycle for Leidos Holdings Inc, a measure of the company's efficiency in managing cash flows related to its operating cycle, has shown some fluctuations over the past five years. In 2023, the cash conversion cycle was 45.64 days, slightly improved from 46.36 days in 2022. This indicates that the company took fewer days to convert its investments in inventory and other resources into cash during the most recent financial year.

Comparing this to previous years, the trend has been relatively stable, with minor variations. The cash conversion cycle was 45.15 days in 2021, 47.70 days in 2020, and 37.17 days in 2019. The decrease in days in 2019 may indicate a more efficient management of working capital during that period.

Overall, while there have been fluctuations in the cash conversion cycle over the years, the recent trend shows an improvement in the efficiency of Leidos Holdings Inc in converting its assets into cash. This could reflect effective inventory management and cash flow practices within the company. Further analysis of the underlying factors impacting the cash conversion cycle could reveal insights into the company's financial performance and operational efficiency.