AGCO Corporation (AGCO)

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 1.34 1.53 1.52 1.99 1.46 1.62 1.57 1.59 1.40 1.58 1.57 1.64 1.45 1.35 1.31 1.26 1.30 1.38 1.48 1.49
Quick ratio 0.49 0.48 0.49 0.95 0.51 0.56 0.50 0.52 0.49 0.49 0.48 0.51 0.54 0.58 0.57 0.57 0.72 0.67 0.50 0.47
Cash ratio 0.16 0.15 0.15 0.58 0.14 0.17 0.11 0.14 0.19 0.17 0.16 0.19 0.26 0.29 0.27 0.26 0.46 0.32 0.16 0.15

AGCO Corporation's liquidity ratios show a mixed trend over the reported periods.

1. Current Ratio:
- The current ratio measures the company's ability to cover short-term obligations with its current assets.
- AGCO's current ratio started at 1.49 in March 2020 and fluctuated between 1.26 and 1.64 until December 2023.
- There was a significant spike to 1.99 in March 2024, reflecting improved short-term liquidity.
- Despite some fluctuations, the current ratio generally remained above 1, indicating the company's ability to meet its short-term obligations with its current assets.

2. Quick Ratio:
- The quick ratio provides a more stringent measure of liquidity by excluding inventory from current assets.
- AGCO's quick ratio ranged between 0.47 and 0.72 from March 2020 to December 2020.
- The ratio fluctuated between 0.48 and 0.58 from March 2021 to December 2023, staying relatively stable with minor fluctuations.
- There was a notable increase to 0.95 in March 2024, suggesting an improvement in the company's ability to meet short-term obligations without relying on inventory.

3. Cash Ratio:
- The cash ratio indicates the proportion of current liabilities covered by cash and cash equivalents.
- AGCO's cash ratio ranged between 0.11 and 0.46 from March 2020 to December 2024.
- The company maintained a cash ratio above 0.1 throughout the periods, indicating a consistent ability to cover a portion of its short-term obligations with cash.
- The ratio peaked at 0.58 in March 2024, suggesting a significant increase in cash reserves relative to current liabilities.

Overall, AGCO Corporation's liquidity ratios reflect a generally stable liquidity position with fluctuations in different periods. The increase in ratios towards the end of the reporting period indicates improved liquidity and a stronger ability to meet short-term obligations, especially in terms of cash reserves.

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 106.83 120.84 113.42 118.47 107.69 104.94 103.59 95.08 77.83 93.44 96.82 89.88 73.08 82.03 79.74 73.90 66.92 106.43 118.65 109.19

The cash conversion cycle (CCC) of AGCO Corporation has shown fluctuations over the past few years. The CCC represents the time it takes for a company to convert its resources (such as inventory) into cash flows from sales.

From March 31, 2020 to December 31, 2024, AGCO's CCC has ranged from a low of 66.92 days to a high of 120.84 days. A lower CCC indicates that the company is more efficient in managing its working capital and converting inventory into cash.

AGCO's CCC increased from 2020 to 2021, reaching a peak of 107.69 days by December 31, 2023 before declining slightly by the end of 2024 to 106.83 days.

It is important for AGCO to monitor and manage its CCC effectively to ensure optimal cash flow management and efficiency in its operations. Fluctuations in the CCC can provide insights into changes in the company's operational efficiency, inventory management, and collection policies.