The AES Corporation (AES)

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 0.80 0.87 0.99 0.78 0.68 0.83 0.94 1.13 1.18 1.29 1.16 1.07 1.13 1.22 1.28 1.24 1.01 1.02 1.10 1.06
Quick ratio 0.39 0.31 0.34 0.43 0.34 0.46 0.49 0.61 0.62 0.68 0.56 0.52 0.59 0.64 0.66 0.68 0.53 0.57 0.60 0.61
Cash ratio 0.19 0.16 0.19 0.26 0.19 0.26 0.27 0.33 0.32 0.38 0.28 0.26 0.25 0.34 0.34 0.41 0.27 0.33 0.34 0.34

The AES Corporation's current ratio has fluctuated over the past few years, ranging from a low of 0.68 on June 30, 2023, to a high of 1.29 on September 30, 2022. Overall, the company's current ratio indicates it has generally been able to meet its short-term obligations with its current assets, although there was a decrease in the ratio towards the end of 2024.

Looking at the quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity. The quick ratio for The AES Corporation has also shown fluctuations, with a low of 0.31 on September 30, 2024, and a high of 0.68 on September 30, 2022. This ratio suggests the company may have some difficulty meeting its immediate liabilities without relying on the sale of inventory.

In terms of the cash ratio, which is the most stringent measure of liquidity as it considers only cash and cash equivalents, The AES Corporation has experienced fluctuations as well. The cash ratio peaked at 0.41 on March 31, 2021, but fell to 0.16 on September 30, 2024. This indicates a decrease in the company's ability to cover its current liabilities with its cash reserves alone.

In conclusion, while The AES Corporation generally maintains a current ratio above 1, indicating its ability to cover short-term obligations with current assets, the quick and cash ratios show more variation and suggest potential liquidity challenges, especially in terms of quickly covering obligations without relying on inventory or other current assets.

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 12.59 6.86 -0.53 -5.16 -10.15 19.14 19.81 29.66 30.67 27.17 20.23 24.00 28.71 26.44 23.18 29.37 17.92 21.81 18.64 24.26

The cash conversion cycle for The AES Corporation has shown fluctuations over the past few years. From March 31, 2020, to December 31, 2020, the company saw a decreasing trend in its cash conversion cycle, indicating efficiency in managing its cash flows. However, there was an increase in the cycle from March 31, 2021, to December 31, 2021, suggesting potential challenges in working capital management.

In the following periods from March 31, 2022, to September 30, 2023, the company experienced varying levels of the cash conversion cycle, with some periods showing improvements in efficiency. Notably, by the end of December 31, 2023, and continuing into the first half of 2024, the cash conversion cycle turned negative. This could imply that the company was able to convert its operating cycle into cash at a faster rate, which can be a positive sign for liquidity and cash flow management.

From September 30, 2024, to December 31, 2024, the cash conversion cycle turned positive again, indicating a slight increase in the time taken to convert inventory and accounts receivable into cash. Overall, the analysis shows that The AES Corporation has had varying success in managing its cash conversion cycle, with both positive and negative trends observed throughout the periods provided.