Aptiv PLC (APTV)

Aptiv PLC's liquidity ratios show a trend of fluctuation over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been healthy, ranging from 1.31 in 2019 to 2.01 in 2021. Specifically, as of December 31, 2023, the current ratio stands at 1.72, indicating that the company has $1.72 in current assets for every dollar of current liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown variability, ranging from 0.86 in 2019 to 1.53 in 2021. As of the end of 2023, the quick ratio is 1.22, suggesting that Aptiv PLC has $1.22 in highly liquid assets available to cover each dollar of current liabilities.

Furthermore, the cash ratio, which provides insight into the company's ability to cover its short-term liabilities with its cash and cash equivalents, has experienced significant fluctuations over the years. The cash ratio has increased from 0.16 in 2019 to 0.81 in 2021, before declining to 0.43 by the end of 2023. This indicates that Aptiv PLC had $0.43 in cash for every dollar of current liabilities at the close of 2023.

Overall, Aptiv PLC's liquidity ratios depict a generally stable liquidity position, with varying levels of short-term liquidity over the years. The company has maintained a sufficient level of current assets to meet its short-term obligations, reflecting a prudent approach to managing its liquidity.

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Additional liquidity measure

The cash conversion cycle of Aptiv PLC has shown varying trends over the past five years. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

In 2019, the cash conversion cycle was 35.24 days, indicating that Aptiv was able to efficiently manage its working capital and swiftly convert its assets into cash. However, over the next few years, the cycle extended, reaching a peak of 56.23 days in 2022. This increase suggests that there may have been delays in the cash conversion process, potentially due to slower inventory turnover or payment collection.

In 2023, the cash conversion cycle improved slightly to 52.18 days, but it remains higher than in 2019, indicating that Aptiv may still be working to optimize its working capital management. Overall, consistent monitoring and efforts to streamline the cash conversion cycle could help Aptiv enhance its efficiency and liquidity position in the future.