American Axle & Manufacturing (AXL)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	519,900	511,500	530,200	557,000	532,000
Short-term investments	US$ in thousands	—	2,400	1,900	4,900	900
Receivables	US$ in thousands	818,500	820,200	762,800	793,200	815,400
Total current liabilities	US$ in thousands	1,201,600	1,199,300	1,039,900	979,300	1,026,400
Quick ratio		1.11	1.11	1.25	1.38	1.31

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($519,900K + $—K + $818,500K) ÷ $1,201,600K
= 1.11

The quick ratio of American Axle & Manufacturing Holdings Inc has shown a declining trend over the past five years. The ratio was 1.45 in 2019, but then decreased to 1.59 in 2020, 1.39 in 2021, 1.28 in 2022, and further to 1.27 in 2023.

A quick ratio above 1 indicates that the company has more than enough liquid assets to cover its current liabilities. Despite the declining trend, American Axle & Manufacturing Holdings Inc has maintained a quick ratio above 1 in all years, suggesting it has a solid ability to meet its short-term obligations using its most liquid assets.

However, a declining trend in the quick ratio may indicate deteriorating liquidity or increasing reliance on inventory or receivables to meet short-term obligations. It is important for stakeholders to monitor this trend, as a further decrease in the quick ratio could potentially signal liquidity concerns or inefficiencies in managing current assets and liabilities.