Alaska Air Group Inc (ALK)

Based on the provided data, we can see a trend of decreasing liquidity ratios for Alaska Air Group Inc over the years.

1. Current Ratio: The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has shown a declining trend from 0.94 in 2020 to 0.61 in both 2023 and 2024. This implies that the company may face challenges in meeting its short-term obligations as its current assets are decreasing relative to its current liabilities.

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. This ratio has followed a similar downward trend, decreasing from 0.78 in 2020 to 0.40 in 2023 and 2024. A decreasing quick ratio indicates that the company may have difficulty meeting its short-term obligations without relying on inventory liquidation.

3. Cash Ratio: The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has also decreased from 0.78 in 2020 to 0.40 in 2023 and 2024. This suggests that Alaska Air Group Inc has a lower proportion of cash available to cover its immediate liabilities.

Overall, the declining trend in all three liquidity ratios signals potential liquidity challenges for Alaska Air Group Inc. It is important for investors and stakeholders to closely monitor the company's liquidity position to ensure its ability to meet its short-term financial obligations.

---

Additional liquidity measure

The cash conversion cycle of Alaska Air Group Inc has shown variability over the past five years. As of December 31, 2020, the company's cash conversion cycle was 5.23 days. Subsequently, this metric decreased to 4.69 days by December 31, 2021, indicating an improvement in the company's efficiency in converting its investments in inventory and accounts receivable into cash.

However, by the end of December 31, 2022, the cash conversion cycle slightly increased to 4.75 days, signaling a small slowdown in the cash conversion process. The trend continued in 2023, with the cycle rising to 5.32 days, suggesting a lengthening of the time it takes for the company to convert its resources into cash.

By December 31, 2024, the cash conversion cycle experienced a significant uptick, reaching 7.75 days. This significant increase may raise concerns about the company's working capital management processes and its ability to efficiently utilize its resources to generate cash.

Overall, while the cash conversion cycle of Alaska Air Group Inc has shown fluctuations over the years, it is essential for the company to focus on optimizing its inventory turnover and accounts receivable collection processes to enhance its cash conversion efficiency and maintain healthy liquidity levels.