American Airlines Group (AAL)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.62 | 0.71 | 0.91 | 0.67 | 0.45 |
| Quick ratio | 0.44 | 0.52 | 0.73 | 0.50 | 0.30 |
| Cash ratio | 0.34 | 0.42 | 0.65 | 0.42 | 0.21 |
The liquidity ratios of American Airlines Group Inc have shown fluctuations over the past five years.
The current ratio, which measures the company's ability to pay its short-term obligations using its current assets, decreased from 0.45 in 2019 to 0.62 in 2023. This suggests that the company may be facing challenges in meeting its short-term liabilities with its current assets.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also demonstrated a declining trend from 0.34 in 2019 to 0.47 in 2023. This indicates that the company may have limited ability to cover its immediate liabilities with its most liquid assets.
Furthermore, the cash ratio, which represents the company's ability to cover its current liabilities with its cash and cash equivalents, increased from 0.24 in 2019 to 0.37 in 2023. This improvement suggests that American Airlines Group Inc may have increased its cash reserves compared to its current liabilities.
Overall, American Airlines Group Inc's liquidity ratios have shown mixed results over the years, with the current and quick ratios weakening while the cash ratio has improved. This indicates that the company may have varying levels of liquidity and may need to focus on managing its short-term obligations more effectively.
See also:
American Airlines Group Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 15.18 | 17.97 | 19.89 | 37.87 | 11.55 |
The cash conversion cycle of American Airlines Group Inc has shown fluctuations over the past five years. The company's ability to efficiently convert its resources into cash has improved significantly from 2019 to 2020, with a cycle of 13.96 days dropping to 28.25 days, indicating a more efficient cash management strategy. However, in subsequent years, the cycle decreased to 18.38 days in 2021 and further to 15.94 days in 2022, before experiencing a slight increase to 14.01 days in 2023.
A lower cash conversion cycle suggests that the company is managing its working capital effectively and is able to convert its inventory and receivables into cash more quickly. This efficiency can be crucial for maintaining liquidity and meeting short-term financial obligations.
Overall, while the cash conversion cycle of American Airlines Group Inc has varied over the years, the company appears to have made improvements in its cash management processes, as reflected in the decreasing trend observed over the specified period.