American Airlines Group (AAL)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 0.54 0.57 0.60 0.58 0.62 0.69 0.75 0.72 0.71 0.79 0.81 0.81 0.91 1.01 1.05 1.04 0.67 0.74 0.77 0.37
Quick ratio 0.37 0.40 0.43 0.41 0.44 0.52 0.58 0.55 0.52 0.60 0.63 0.64 0.73 0.84 0.89 0.87 0.50 0.57 0.59 0.24
Cash ratio 0.29 0.33 0.34 0.33 0.34 0.43 0.50 0.47 0.42 0.51 0.55 0.57 0.65 0.77 0.83 0.81 0.42 0.50 0.55 0.19

American Airlines Group's liquidity ratios have shown fluctuations over the past few years. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, was below 1 in the earlier periods, indicating potential liquidity challenges. However, the current ratio improved and stabilized above 1 from March 2021 onwards, reaching its peak of 1.05 in June 2021, suggesting a more favorable liquidity position.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, followed a similar pattern of improvement over time. Although it remained below 1 in most periods, indicating potential difficulty in meeting immediate obligations without inventory, it also increased steadily and peaked at 0.89 in June 2021 before declining slightly.

The cash ratio, which reflects the proportion of current liabilities covered by cash and cash equivalents, generally showed an increasing trend, indicating a strengthening ability to meet short-term obligations with cash on hand. However, the ratio fluctuated within a narrower range compared to the current and quick ratios, suggesting a more stable cash position.

Overall, American Airlines Group's liquidity ratios have shown improvement and stabilization in recent periods, indicating a better ability to meet short-term obligations and manage liquidity effectively. However, the company may need to continue monitoring and managing its liquidity position to ensure ongoing financial stability and resilience in the face of potential challenges.

See also:

American Airlines Group Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 15.51 12.29 10.16 10.48 15.18 18.08 13.60 12.97 17.97 17.85 11.85 10.00 19.89 21.26 19.48 30.53 37.11 29.91 19.33 10.79

The cash conversion cycle of American Airlines Group has shown fluctuating trends over the quarters from March 2020 to December 2024. The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

American Airlines Group experienced a decreasing trend in the cash conversion cycle from March 2020 to June 2021, indicating efficiency in managing working capital and converting inventory into cash. However, the cycle started to increase from September 2021 to December 2024, signifying a potential lengthening in the time it takes for the company to generate cash from its operations.

The company's cash conversion cycle ranged from a low of 10.00 days in March 2022 to a high of 37.11 days in December 2020. The most recent data point as of December 31, 2024, shows a cash conversion cycle of 15.51 days.

A shorter cash conversion cycle typically indicates better liquidity and efficient use of resources, while a longer cycle may imply potential challenges in managing working capital effectively. It is important for American Airlines Group to monitor and optimize its cash conversion cycle to ensure healthy cash flow operations and financial performance in the long run.