Air Products and Chemicals Inc (APD)
Liquidity ratios
| 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.52 | 1.27 | 1.49 | 1.81 | 1.33 | 1.36 | 2.04 | 1.93 | 1.81 | 1.87 | 1.95 | 2.47 | 2.99 | 3.11 | 2.91 | 2.95 | 3.59 | 3.48 | 2.59 | 2.59 |
| Quick ratio | 1.20 | 0.93 | 1.07 | 1.27 | 1.00 | 0.97 | 1.57 | 1.55 | 1.49 | 1.51 | 1.59 | 2.09 | 2.62 | 2.73 | 2.55 | 2.59 | 3.20 | 3.14 | 2.12 | 2.03 |
| Cash ratio | 0.71 | 0.54 | 0.65 | 0.72 | 0.50 | 0.48 | 0.90 | 0.96 | 0.95 | 0.97 | 1.00 | 1.40 | 2.07 | 2.16 | 2.05 | 2.08 | 2.63 | 2.48 | 1.23 | 1.32 |
Air Products and Chemicals Inc's liquidity ratios show varying trends over the reporting periods. The current ratio, which measures the company's ability to cover short-term obligations with current assets, has generally been above 1, indicating a healthy liquidity position. However, there was a noticeable decline in the current ratio from 2.99 in September 2021 to 1.52 in September 2024. This may raise some concern about the company's ability to meet its short-term obligations.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also shows a decreasing trend over the periods. The quick ratio dropped from 2.73 in June 2021 to 1.20 in September 2024, indicating a potential reduction in the company's ability to meet immediate obligations without relying on inventory liquidation.
The cash ratio, which assesses the company's ability to cover current liabilities with only cash and cash equivalents, paints a similar picture of declining liquidity over time. The cash ratio decreased from 2.63 in September 2020 to 0.71 in September 2024, indicating a potential strain on the company's cash reserves to cover short-term obligations.
Overall, the liquidity ratios of Air Products and Chemicals Inc reflect a weakening liquidity position over the reporting periods, which may warrant further investigation into the company's cash management and operational efficiency to ensure sustainable liquidity in the future.
See also:
Air Products and Chemicals Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 33.77 | 81.14 | 79.32 | 76.84 | 36.51 | 86.00 | 82.36 | 85.75 | 23.51 | 75.47 | 81.64 | 81.27 | 41.72 | 79.46 | 82.50 | 86.86 | 47.64 | 95.87 | 89.94 | 77.26 |
The cash conversion cycle of Air Products and Chemicals Inc has shown fluctuations over the past few quarters, indicating variations in the company's efficiency in managing its cash flows and working capital.
The cash conversion cycle represents the time taken by a company to convert its investments in inventory and other resources into cash from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is efficient in managing its working capital and liquidity.
Analyzing the data provided:
- In the most recent quarter, as of September 30, 2024, Air Products and Chemicals Inc had a cash conversion cycle of 33.77 days, which is relatively lower compared to the previous quarter, indicating an improvement in working capital management efficiency.
- The highest cash conversion cycle in the dataset was recorded on June 30, 2020, at 95.87 days. This suggests that it took the company a longer time to convert its investments into cash during that period, potentially highlighting challenges in managing working capital efficiently.
- Overall, there have been fluctuations in the cash conversion cycle throughout the dataset, with some quarters showing improvements while others indicate challenges in working capital management.
It is important for Air Products and Chemicals Inc to closely monitor its cash conversion cycle and work towards optimizing its working capital management processes to ensure efficient utilization of resources and improved cash flow generation.