Archer-Daniels-Midland Company (ADM)

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 5.44 1.40 1.44 1.47 1.60 1.69 1.63 1.51 1.46 1.51 1.47 1.42 1.45 1.58 1.65 1.58 1.50 1.64 1.72 1.51
Quick ratio 0.45 0.41 0.41 0.62 0.68 0.51 0.51 0.42 0.05 0.05 0.04 0.39 0.41 0.48 0.46 0.38 0.36 0.46 0.49 0.57
Cash ratio 0.45 0.41 0.41 0.62 0.68 0.51 0.51 0.42 0.05 0.05 0.04 0.39 0.41 0.48 0.46 0.38 0.36 0.46 0.49 0.57

Archer-Daniels-Midland Company's liquidity ratios have shown fluctuations over the years. The current ratio, which indicates the company's ability to cover short-term obligations with its current assets, fluctuated between 1.40 to 5.44 over the period from March 31, 2020, to December 31, 2024. While the current ratio generally stayed above 1, suggesting a healthy level of liquidity, the significant spike to 5.44 on December 31, 2024, may require further investigation to ensure its accuracy.

The quick ratio, a measure of the company's ability to meet short-term obligations with its most liquid assets, varied from 0.04 to 0.68 during the same period. The ratio stayed mostly below 1, indicating a potential challenge in meeting immediate obligations without relying on inventory. The quick ratio also saw a notable improvement towards the end of the period, reaching 0.68 on December 31, 2023, showing an improved ability to cover short-term liabilities.

The cash ratio, which is a stricter measure of liquidity focusing solely on cash and cash equivalents to cover short-term liabilities, moved in line with the quick ratio, ranging between 0.04 to 0.68 over the observed period. It also peaked on December 31, 2023, similar to the quick ratio, suggesting a stronger cash position at that point.

Overall, while Archer-Daniels-Midland Company generally maintained a current ratio above 1, indicating a reasonable liquidity position, the quick and cash ratios displayed more variability. Further monitoring of these ratios, particularly the quick and cash ratios, can provide insights into the company's ability to meet short-term obligations effectively.

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 52.96 48.10 46.01 49.78 50.10 45.70 46.89 57.04 57.19 53.13 60.50 75.43 66.68 54.76 60.10 73.68 71.37 54.73 46.39 53.58

Archer-Daniels-Midland Company's cash conversion cycle has shown fluctuations over the period analyzed. The cash conversion cycle represents the time it takes for the company to convert its resources, such as inventory and accounts receivable, into cash.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 45.70 days to a high of 75.43 days. A lower cash conversion cycle indicates that the company is efficiently managing its working capital and converting inventory and receivables into cash quickly.

Overall, the company experienced some variability in its cash conversion cycle, with some fluctuations noted, which might indicate changes in inventory management, sales cycles, or accounts receivable collection processes. It is essential for the company to closely monitor and manage its cash conversion cycle to ensure optimal efficiency and liquidity in its operations.