Axalta Coating Systems Ltd (AXTA)

Liquidity ratios

Dec 31, 2024 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
Current ratio 2.01 2.00 2.26 2.07 1.98 2.05 2.02 2.05 1.94 1.98 1.93 1.87 1.93 1.97 2.51 2.43 2.48 2.68 2.88 2.17
Quick ratio 1.36 1.31 1.58 1.40 1.37 1.40 1.35 1.31 1.24 1.21 1.20 1.19 1.33 1.31 1.86 1.82 1.89 2.03 2.08 1.42
Cash ratio 0.44 0.40 0.63 0.47 0.49 0.45 0.39 0.40 0.47 0.39 0.38 0.43 0.63 0.49 1.01 1.06 1.15 1.26 1.31 0.65

Axalta Coating Systems Ltd's current ratio has shown some fluctuations over the years but generally has been above 1, indicating that the company has had more than enough current assets to cover its current liabilities. However, the current ratio has been gradually decreasing from a high of 2.88 in June 2020 to 2.01 in December 2024, which may indicate a slight weakening in the company's short-term liquidity position.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventories from current assets, has also shown a declining trend, indicating a potential reduction in the company's ability to pay off its immediate obligations without relying on selling inventory.

The cash ratio, which is the most stringent liquidity ratio focusing solely on cash and cash equivalents to cover current liabilities, has also decreased over time, falling from 1.31 in June 2020 to 0.44 in December 2024. This suggests that Axalta Coating Systems Ltd may have had a reduced ability to cover its short-term obligations with its cash reserves alone.

In summary, Axalta Coating Systems Ltd's liquidity ratios have shown a general decline over the years, indicating the need for the company to carefully manage its short-term liquidity position to ensure it can meet its payment obligations efficiently.

Additional liquidity measure

Dec 31, 2024 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
Cash conversion cycle days 92.19 98.93 90.58 89.74 90.03 95.87 96.94 93.11 87.60 91.29 91.18 84.44 78.61 93.70 89.87 88.24 84.43 86.07 85.67 75.97

The cash conversion cycle of Axalta Coating Systems Ltd has shown some fluctuations over the observed period. The cycle measures the time it takes for a company to convert its investment in inventory into cash flows from sales.

From March 31, 2020, to September 30, 2021, the cash conversion cycle increased steadily from 75.97 days to 93.70 days, indicating a longer period for the company to convert its resources into cash. This trend suggests potential challenges in managing inventory and collecting receivables efficiently.

However, in the subsequent quarters, the cash conversion cycle showed some improvement, decreasing to 78.61 days by December 31, 2021. This reduction may indicate enhanced working capital management practices within the company.

For the period up to December 31, 2024, the cycle continued to fluctuate between 89.74 days and 98.93 days, with some quarters showing increases in the cash conversion cycle. These fluctuations may be influenced by factors such as sales seasonality, inventory management, and payment terms with customers and suppliers.

Overall, monitoring the cash conversion cycle is crucial for Axalta Coating Systems Ltd to assess the efficiency of its operating cycle and working capital management, identifying areas for improvement to optimize cash flows and enhance overall financial performance.