Omnicom Group Inc (OMC)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.95 | 0.97 | 0.96 | 0.96 | 0.97 | 0.95 | 0.95 | 0.95 | 0.98 | 1.00 | 1.00 | 1.02 | 1.00 | 0.98 | 0.96 | 0.92 | 0.91 | 0.87 | 0.85 | 0.88 |
| Quick ratio | 0.81 | 0.77 | 0.77 | 0.77 | 0.83 | 0.77 | 0.78 | 0.78 | 0.85 | 0.84 | 0.85 | 0.86 | 0.86 | 0.79 | 0.76 | 0.73 | 0.76 | 0.68 | 0.67 | 0.70 |
| Cash ratio | 0.27 | 0.21 | 0.21 | 0.25 | 0.29 | 0.26 | 0.25 | 0.28 | 0.33 | 0.32 | 0.32 | 0.36 | 0.36 | 0.27 | 0.29 | 0.21 | 0.27 | 0.18 | 0.19 | 0.23 |
Omnicom Group, Inc.'s liquidity ratios have been relatively stable over the past eight quarters. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has remained close to 1, indicating that Omnicom may have some difficulty meeting its current liabilities with its current assets in each period. The company's current ratio ranged from 0.95 to 0.97 during this period.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also been relatively stable, ranging from 0.84 to 0.89. This suggests that Omnicom may face challenges in meeting its short-term obligations using only its most liquid assets.
The cash ratio, which is the most conservative measure of liquidity and indicates the company's ability to cover current liabilities with its cash and cash equivalents, has fluctuated between 0.28 and 0.35. This indicates that Omnicom has a low level of cash on hand relative to its current liabilities, which may pose a liquidity risk if the company faces sudden financial obligations.
Overall, Omnicom Group, Inc.'s liquidity ratios suggest that the company may have some challenges in meeting its short-term obligations with its current assets and cash reserves. Management should closely monitor and manage its liquidity position to ensure that it can respond to any unexpected changes in the business environment.
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -76.52 | -46.21 | -51.75 | -56.51 | -84.60 | -62.07 | -68.46 | -76.21 | -106.47 | -79.82 | -84.59 | -73.40 | -103.96 | -51.63 | -56.84 | -66.57 | -107.89 | -65.48 | -75.56 | -78.25 |
Omnicom Group, Inc.'s cash conversion cycle has shown variability over the past eight quarters, ranging from a low of 167.00 days in Q3 2022 to a high of 215.14 days in Q4 2023. The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash received from customers.
A decreasing trend in the cash conversion cycle is generally considered favorable as it indicates that the company is able to sell its inventory more quickly and collect cash from customers faster. In this case, we can observe a pattern of improvement between Q2 2022 and Q3 2023, suggesting potential efficiency gains in managing working capital.
However, the increase in the cash conversion cycle in Q4 2023 compared to the previous quarter may raise concerns about the company's ability to efficiently manage its working capital. It is important for Omnicom Group, Inc. to closely monitor and analyze the factors contributing to fluctuations in the cash conversion cycle to ensure optimal liquidity management and operational efficiency.