The Boeing Company (BA)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.32 | 1.14 | 1.22 | 1.33 | 1.39 |
| Quick ratio | 0.30 | 0.19 | 0.22 | 0.23 | 0.32 |
| Cash ratio | 0.27 | 0.17 | 0.19 | 0.20 | 0.29 |
The Boeing Company's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, have shown varying trends over the five-year period from 2020 to 2024.
1. Current Ratio: The current ratio measures the company's ability to cover its short-term obligations with its current assets. Boeing's current ratio decreased from 1.39 in 2020 to 1.14 in 2023 before slightly rebounding to 1.32 in 2024. A current ratio above 1 indicates that Boeing has more current assets than current liabilities, suggesting the company can meet its short-term obligations.
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. Boeing's quick ratio declined from 0.32 in 2020 to 0.19 in 2023, indicating a decrease in the company's ability to cover its immediate liabilities with its most liquid assets. However, the ratio improved to 0.30 in 2024, but it still remains relatively low.
3. Cash Ratio: The cash ratio specifically focuses on the company's ability to pay off its current liabilities with its cash and cash equivalents. Boeing's cash ratio decreased from 0.29 in 2020 to 0.17 in 2023 before increasing to 0.27 in 2024. This trend suggests fluctuations in Boeing's cash position over the years, with a notable drop in 2023 followed by a recovery in 2024.
Overall, Boeing's liquidity ratios reflect a mix of strengths and challenges in managing its short-term financial obligations. The company may need to closely monitor its liquidity position and current asset management to ensure it can efficiently meet its short-term liabilities in the future.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 13.47 | 2.78 | 10.64 | 24.44 | 4.46 |
The cash conversion cycle of The Boeing Company has experienced fluctuations over the past five years. In December 2020, the company's cash conversion cycle was 4.46 days, indicating a relatively efficient management of working capital. However, by the end of December 2021, the cash conversion cycle had increased significantly to 24.44 days, suggesting potential challenges in converting investments in inventory and accounts receivable into cash.
During December 2022, the cash conversion cycle improved to 10.64 days, indicating a more efficient use of cash flows in the operations of the business. By December 2023, the cycle further decreased to 2.78 days, reflecting a rapid conversion of investments into cash. However, in December 2024, the cycle increased to 13.47 days, indicating a slight slowdown in the cash conversion process compared to the previous year.
Overall, fluctuations in The Boeing Company's cash conversion cycle over the analyzed period suggest varying efficiency levels in managing working capital and cash flows, which can impact the company's liquidity and operational performance.