R1 RCM Inc (RCM)

R1 RCM Inc.'s liquidity ratios, as reflected in the provided data table, demonstrate the company's ability to meet its short-term financial obligations. The current ratio, which compares current assets to current liabilities, has remained relatively stable over the quarters, ranging from 1.61 to 1.89. This indicates that the company has sufficient current assets to cover its current liabilities, with a higher ratio suggesting a stronger liquidity position.

The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. R1 RCM Inc.'s quick ratio mirrors its current ratio, indicating that even without considering inventory, the company can comfortably meet its short-term obligations. Consistent ratios across quarters signify a stable liquidity position.

The cash ratio, which measures the company's ability to cover its current liabilities with its most liquid assets, such as cash and cash equivalents, has shown fluctuations but generally remained above 1. This implies that R1 RCM Inc. holds sufficient cash reserves to settle its short-term debts, with a ratio above 1 indicating a strong ability to cover liabilities using cash alone.

In summary, R1 RCM Inc. exhibits a satisfactory liquidity position based on its current ratio, quick ratio, and cash ratio trends. This suggests that the company has adequate liquidity to fund its operations and meet its financial obligations in the short term.

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Additional liquidity measure

The cash conversion cycle of R1 RCM Inc. has shown a fluctuating trend over the past eight quarters. In Q1 2022, the company had a relatively low cash conversion cycle of 26.11 days, indicating a shorter period for R1 RCM to convert its investments in inventory and other resources into cash inflows from sales. However, the cash conversion cycle increased in the following quarters, reaching a peak of 47.76 days in Q4 2022.

Subsequently, there was a downward trend in the cash conversion cycle, with Q2 2023 showing the lowest figure of 39.52 days. This suggests an improvement in the efficiency of R1 RCM's operational and financial management processes in converting its resources into cash.

Overall, R1 RCM Inc. has shown fluctuations in its cash conversion cycle, indicating varying levels of efficiency in managing its working capital and cash flow throughout the analyzed period. The company should continue monitoring and optimizing its cash conversion cycle to ensure optimal utilization of resources and liquidity management.