Apple Inc (AAPL)
Liquidity ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.87 | 0.99 | 0.88 | 1.07 | 1.36 |
| Quick ratio | 0.75 | 0.84 | 0.71 | 0.91 | 1.22 |
| Cash ratio | 0.37 | 0.42 | 0.31 | 0.50 | 0.86 |
Looking at Apple Inc's liquidity ratios over the past five years, we can observe a downward trend in the current ratio, quick ratio, and cash ratio.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, decreased from 1.36 in 2020 to 0.87 in 2024. This indicates a decline in Apple's short-term liquidity position and ability to meet its current obligations.
Similarly, the quick ratio, also known as the acid-test ratio, which provides a more stringent measure of liquidity by excluding inventories from current assets, has decreased from 1.22 in 2020 to 0.75 in 2024. This suggests that Apple's ability to cover its short-term liabilities with its most liquid assets has decreased over the years.
The cash ratio, which is the most conservative liquidity ratio and measures the company's ability to cover its current liabilities with cash and cash equivalents, has also shown a declining trend from 0.86 in 2020 to 0.37 in 2024. This indicates that Apple's cash position relative to its current liabilities has weakened over the years.
Overall, the decreasing trend in Apple Inc's liquidity ratios raises concerns about the company's ability to meet its short-term obligations using its current assets and highlights the importance of closely monitoring its liquidity management strategies going forward.
See also:
Additional liquidity measure
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -33.37 | -27.25 | -30.04 | -23.09 | -23.34 |
The cash conversion cycle for Apple Inc has shown varying trends over the past five years. In Sep 2020, the company had a cash conversion cycle of -23.34 days, indicating that it was able to convert its inventory into cash fairly quickly. This trend continued in Sep 2021 with a slightly lower cash conversion cycle of -23.09 days, highlighting the efficiency in managing its working capital.
However, in Sep 2022, the cash conversion cycle increased to -30.04 days, which suggests a slight delay in converting inventory into cash compared to the previous year. This trend continued in Sep 2023 with a further increase to -27.25 days, indicating a continued slowdown in the conversion process.
In Sep 2024, Apple Inc's cash conversion cycle improved to -33.37 days, reflecting a positive change in the efficiency of the company's cash conversion process compared to the previous year. This suggests that Apple Inc was able to optimize its working capital management and streamline its operations to convert inventory into cash more rapidly.
Overall, the cash conversion cycle for Apple Inc has shown fluctuations over the past five years, with variations in the efficiency of converting inventory into cash. Despite some fluctuations, the company has generally maintained a negative cash conversion cycle, indicating efficient working capital management.