Teradata Corp (TDC)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.87 | 1.02 | 1.07 | 1.10 | 1.14 |
| Quick ratio | 0.78 | 0.94 | 0.90 | 0.91 | 1.02 |
| Cash ratio | 0.49 | 0.57 | 0.57 | 0.56 | 0.56 |
Teradata Corp's liquidity ratios have shown a downward trend over the past five years. The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, has decreased from 1.14 in 2019 to 0.87 in 2023. Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also declined from 1.11 in 2019 to 0.86 in 2023.
The cash ratio, which indicates the company's ability to cover its short-term liabilities with its highly liquid assets such as cash and marketable securities, has decreased slightly from 0.66 in 2019 to 0.57 in 2023.
Overall, Teradata Corp's liquidity position has weakened over the years, as indicated by the declining trend in these key liquidity ratios. This may raise concerns about the company's ability to meet its short-term financial obligations and may require closer monitoring and management of its liquidity position in the future.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 31.68 | 50.65 | 49.96 | 59.04 | 68.37 |
Teradata Corp's cash conversion cycle has shown a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle improved significantly to 12.72 days, indicating that it took less time for the company to convert its investments in inventory and other resources into cash. This improvement suggests better efficiency in managing working capital.
In contrast, in 2020 and 2019, Teradata Corp had longer cash conversion cycles of 71.13 days and 62.97 days, respectively. This indicates that the company took a longer time to convert its resources into cash during those years, potentially facing challenges in managing inventory levels, accounts receivable, and accounts payable.
Overall, Teradata Corp has made substantial progress in optimizing its cash conversion cycle, with the latest data showing a significant improvement. However, the company should continue to focus on enhancing its working capital management to ensure efficient operations and strong financial performance in the future.