Omnicom Group Inc (OMC)

Omnicom Group Inc's liquidity ratios have fluctuated over the period from March 31, 2020, to December 31, 2024.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, has shown some variability. It started at a low of 0.92 on March 31, 2020, increased to a peak of 1.02 on March 31, 2021, and fluctuated around the 1.00 mark thereafter, ending at 1.00 on December 31, 2024. Although there were fluctuations, the current ratio generally remained close to 1, indicating that Omnicom Group Inc typically had just enough current assets to cover its current liabilities.

The quick ratio, a stricter measure of liquidity that excludes inventory from current assets, also showed fluctuations during the same period. Starting at 0.73 on March 31, 2020, the ratio increased to 0.86 by December 31, 2020, before fluctuating in a range between 0.74 and 0.83 until December 31, 2024. The quick ratio remained relatively consistent over the years, indicating that Omnicom Group Inc had a stable ability to cover its short-term obligations without relying on inventory.

The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, experienced some ups and downs. It ranged from a low of 0.18 on June 30, 2024, to a high of 0.36 on December 31, 2020, before stabilizing around 0.27 towards the end of the period on December 31, 2024. This suggests that while the company had a varying amount of cash on hand at different points, it generally maintained a sufficient level of cash reserves to cover its immediate liabilities.

Overall, Omnicom Group Inc maintained a relatively stable liquidity position throughout the period, with its current, quick, and cash ratios staying within reasonable ranges to meet its short-term financial obligations.

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Additional liquidity measure

Omnicom Group Inc's cash conversion cycle has exhibited fluctuations over the years based on the provided data. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory into cash flows from sales.

From March 31, 2020, to December 31, 2024, the company consistently maintained a negative cash conversion cycle, indicating efficient management of working capital. The trend shows an initial improvement in efficiency as the days decreased from -66.57 to -103.96 days by December 31, 2020, signaling a decrease in the time it takes to convert inventory into cash.

However, there was some fluctuation in the subsequent quarters, with the cycle fluctuating between -51.63 and -84.60 days. Notably, there was a significant decrease in efficiency by March 31, 2023, with the cycle increasing to -76.52 days. This indicates a possible delay in converting inventory into cash flows.

In the following quarters, the company made efforts to improve efficiency, as evidenced by a decline in the cash conversion cycle days to -45.20 days by June 30, 2024. This suggests that Omnicom Group Inc effectively managed its working capital by reducing the time it takes to convert investments in inventory into cash.

Overall, the trend in Omnicom Group Inc's cash conversion cycle reflects varying degrees of efficiency in managing working capital, indicating the company's ability to streamline its operations to enhance cash flows.