Allegiant Travel Company (ALGT)

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 0.78 0.75 0.74 0.76 0.83 1.09 1.13 1.16 1.46 1.32 1.53 1.59 2.02 1.91 1.74 1.35 1.37 1.22 1.09 0.98
Quick ratio 0.68 0.67 0.66 0.67 0.74 0.93 0.96 0.95 1.22 1.19 1.41 1.47 1.88 1.76 1.62 1.23 1.27 1.13 1.01 0.86
Cash ratio 0.61 0.62 0.60 0.61 0.68 0.89 0.92 0.90 1.10 1.10 1.32 1.36 1.78 1.55 1.41 0.98 0.99 0.91 0.77 0.61

Allegiant Travel Company's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term obligations and cover immediate liabilities.

1. Current Ratio: The current ratio measures a company's ability to cover its short-term obligations with its current assets. Allegiant's current ratio shows a fluctuating trend over the years, ranging from a low of 0.76 in March 2024 to a high of 2.02 in December 2021. A ratio above 1 indicates that Allegiant has more current assets than current liabilities, with the company having improved its ratio by the end of 2021.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Allegiant's quick ratio also demonstrates variability, from a low of 0.66 in June 2024 to a high of 1.88 in December 2021. Similar to the current ratio, a quick ratio above 1 signifies that Allegiant has an adequate level of liquid assets to cover short-term liabilities.

3. Cash Ratio: The cash ratio reflects the company's ability to settle its current liabilities using only its cash and cash equivalents. Allegiant's cash ratio ranges from 0.60 in June 2024 to 1.78 in December 2021, indicating the company's ability to rely on cash reserves to meet short-term obligations.

Overall, Allegiant Travel Company's liquidity position, as reflected in its current, quick, and cash ratios, has shown fluctuations over the years. While the company's ratios have generally remained above 1, suggesting a healthy liquidity position, there are periods of decline which may warrant attention and monitoring to ensure the company can meet its 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 -1.47 3.23 0.10 -0.31 -8.58 -14.12 -17.58 -3.61 -7.15 8.72 5.39 9.95 0.29 34.58 43.64 75.50 59.94 38.98 45.37 28.91

The cash conversion cycle of Allegiant Travel Company has shown significant fluctuations over the reported periods.

From March 31, 2020, to December 31, 2021, the cash conversion cycle increased steadily, indicating a longer period between the company's cash outflows and inflows. This rise peaked at 75.50 days on March 31, 2021, raising concerns about its working capital management.

However, from December 31, 2021, to June 30, 2022, there was a drastic improvement as the cycle decreased sharply, indicating a more efficient cash management process. The negative values recorded from December 31, 2022, to June 30, 2024, are unusual and suggest a scenario where the company's payables and receivables are being managed exceptionally well, leading to negative cycle days.

The recent positive values from September 30, 2024, suggest that the company may have extended its payables or reduced its receivables, contributing to its current cash conversion cycle. Overall, while the company experienced fluctuations, the negative cycle days observed raise questions about the effectiveness of its working capital management practices.