Autoliv Inc (ALV)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.98 | 1.01 | 1.04 | 1.15 | 1.02 | 1.04 | 1.07 | 1.28 | 1.30 | 1.32 | 1.33 | 1.38 | 1.36 | 1.25 | 1.57 | 1.49 | 1.25 | 1.26 | 1.26 | 1.14 |
| Quick ratio | 0.68 | 0.12 | 0.13 | 0.20 | 0.70 | 0.14 | 0.11 | 0.31 | 0.80 | 0.32 | 0.31 | 0.39 | 0.95 | 0.46 | 0.57 | 0.41 | 0.70 | 0.86 | 0.86 | 0.80 |
| Cash ratio | 0.12 | 0.12 | 0.13 | 0.20 | 0.16 | 0.14 | 0.11 | 0.31 | 0.18 | 0.32 | 0.31 | 0.39 | 0.37 | 0.46 | 0.57 | 0.41 | 0.03 | 0.15 | 0.17 | 0.16 |
Autoliv Inc.'s liquidity ratios have exhibited fluctuations over the past eight quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, declined from 1.15 in Q1 2023 to 0.98 in Q4 2023, indicating a potential deterioration in liquidity. Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, decreased from 0.87 in Q1 2023 to 0.73 in Q4 2023. This suggests that Autoliv may have difficulty meeting its short-term obligations without relying on inventory.
On the other hand, the cash ratio, which reflects the proportion of cash and cash equivalents to current liabilities, fluctuated between 0.17 and 0.27 during the same period. The downward trend in the cash ratio from 0.39 in Q1 2022 to 0.17 in Q4 2023 indicates that Autoliv's liquidity position may have weakened over time, as the company may have reduced cash reserves relative to its current liabilities.
In summary, Autoliv Inc.'s liquidity ratios have shown mixed performance, with a decline in the current and quick ratios, along with fluctuations in the cash ratio. This indicates a potential strain on the company's ability to meet its short-term financial obligations, highlighting the importance of closely monitoring its liquidity management strategies.
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 40.97 | -36.12 | -37.96 | -31.12 | 47.51 | -27.42 | -19.91 | -23.82 | 59.73 | -7.42 | -10.70 | -18.69 | 66.48 | -11.27 | 8.13 | -4.57 | 59.96 | 63.19 | 61.86 | 64.29 |
The cash conversion cycle of Autoliv Inc. has fluctuated over the past eight quarters, ranging from a low of 37.94 days in Q4 2023 to a high of 58.27 days in Q2 2022. This metric measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales. A shorter cash conversion cycle indicates that the company is efficient in managing its working capital and turning inventory and receivables into cash quickly.
In general, Autoliv Inc. has shown some improvement in its cash conversion cycle in recent quarters, with a declining trend observed from Q2 2022 to Q4 2023. This suggests that the company has been more effective in managing its inventory, collecting receivables, and paying suppliers. However, it is important for the company to continue monitoring and optimizing its cash conversion cycle to ensure liquidity and operational efficiency.