Xerox Corp (XRX)

Liquidity ratios

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio 1.12 1.14 1.23 1.66 2.33
Quick ratio 0.52 0.49 0.57 1.31 1.85
Cash ratio 0.22 0.19 0.31 0.65 1.06

Based on the provided data, Xerox Corp's liquidity ratios have shown a decline over the years analyzed.

1. Current Ratio: The current ratio, which measures the firm's ability to cover short-term liabilities with its current assets, has decreased from 2.33 in 2020 to 1.12 in 2024. This indicates a weakening ability to meet short-term obligations.

2. Quick Ratio: The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also exhibited a downward trend from 1.85 in 2020 to 0.52 in 2024. This suggests a diminishing ability to meet immediate short-term liabilities without relying on inventory.

3. Cash Ratio: The cash ratio, reflecting the company's ability to cover immediate liabilities with cash and cash equivalents, has seen a notable decrease from 1.06 in 2020 to 0.22 in 2024. This decline indicates a reduced capacity to satisfy short-term obligations using only cash resources.

Overall, the decreasing trend in Xerox Corp's liquidity ratios suggests a potential strain on the company's ability to meet its short-term financial obligations with its current liquid assets. This may signal a need for closer monitoring of the firm's liquidity management practices and a focus on improving its ability to generate and preserve liquid resources.


Additional liquidity measure

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash conversion cycle days -18.54 -23.96 -52.88 24.22 75.85

Xerox Corp's cash conversion cycle, which represents the time it takes for the company to convert its investments in inventory into sales and then into cash, has shown significant fluctuations over the years.

As of December 31, 2020, the cash conversion cycle stood at 75.85 days, indicating that it took the company nearly 76 days to complete the cycle.

By December 31, 2021, the cash conversion cycle improved to 24.22 days, suggesting that the company was able to convert its investments into cash more efficiently.

A notable shift occurred by December 31, 2022, when the cash conversion cycle turned negative at -52.88 days. This negative figure implies that Xerox Corp was able to generate cash before paying for its inventory, showcasing strong management of working capital.

The trend continued into December 31, 2023, with a cash conversion cycle of -23.96 days, indicating further improvement in the efficiency of converting investments into cash.

By December 31, 2024, the cash conversion cycle decreased further to -18.54 days, reflecting continued efficiency in the company's operations and working capital management.

Overall, the decreasing trend in the cash conversion cycle over the years suggests that Xerox Corp has been able to streamline its operations, reduce inventory holding periods, and collect cash more quickly, which can lead to improved liquidity and financial performance.