Axalta Coating Systems Ltd (AXTA)

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 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 2.40 2.35 2.32 2.21
Quick ratio 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 1.72 1.65 1.56 1.39
Cash ratio 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 0.95 0.74 0.58 0.49

Based on the provided data, the liquidity ratios of Axalta Coating Systems Ltd demonstrate consistent levels of liquidity over the past eight quarters.

1. Current Ratio:
The current ratio, which indicates the company's ability to meet short-term obligations using its current assets, has shown stability within the range of 1.87 to 2.05. With values consistently above 1.5, Axalta Coating Systems Ltd appears to have a healthy level of current assets to cover its current liabilities.

2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Axalta Coating Systems Ltd's quick ratio has also been relatively stable, ranging from 1.29 to 1.50. This indicates that the company has an adequate level of highly liquid assets to cover its short-term liabilities.

3. Cash Ratio:
The cash ratio, the most conservative liquidity measure, focuses solely on the company's ability to cover its current liabilities with its cash and cash equivalents. Despite some fluctuations, Axalta Coating Systems Ltd has maintained its cash ratio in the range of 0.49 to 0.57, suggesting a consistent ability to meet its short-term obligations with cash on hand.

In conclusion, based on the liquidity ratios analyzed, Axalta Coating Systems Ltd appears to have maintained a solid liquidity position over the past eight quarters, with sufficient current assets and cash reserves to meet its short-term financial obligations.

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 90.04 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 78.09 84.82 87.24 80.75

The cash conversion cycle of Axalta Coating Systems Ltd has shown fluctuations over the past eight quarters, ranging from 84.90 days to 98.44 days. Generally, a shorter cash conversion cycle is preferred as it indicates that the company is efficiently managing its working capital.

In the most recent quarter, Q4 2023, the cash conversion cycle was 90.36 days, which is a slight improvement compared to the previous quarter. This implies that Axalta Coating Systems Ltd was able to convert its investments in inventory back into cash more quickly in Q4 2023.

However, it is worth noting that the cash conversion cycle has been above 90 days for the past five quarters, indicating a lengthier process in converting inventory into cash. This could suggest potential inefficiencies in managing inventory or in collecting receivables.

Overall, Axalta Coating Systems Ltd should focus on optimizing its inventory management and collection processes to reduce its cash conversion cycle, which would ultimately improve its working capital efficiency and financial health.