The Boeing Company (BA)

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 1.14 1.15 1.17 1.16 1.22 1.22 1.25 1.30 1.33 1.36 1.35 1.33 1.39 1.42 1.41 1.17 1.05 1.11 1.03 1.07
Quick ratio 0.19 0.18 0.18 0.19 0.22 0.19 0.17 0.18 0.23 0.26 0.27 0.27 0.32 0.32 0.38 0.20 0.14 0.16 0.14 0.14
Cash ratio 0.17 0.14 0.15 0.16 0.19 0.16 0.14 0.15 0.20 0.23 0.24 0.24 0.29 0.29 0.35 0.16 0.10 0.12 0.10 0.09

The current ratio, which measures Boeing Co.'s ability to cover short-term liabilities with its current assets, has exhibited a decreasing trend over the past eight quarters, declining from 1.30 as of March 31, 2022, to 1.14 as of December 31, 2023. This indicates that the company's short-term liquidity position has weakened during this period.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also shows a decreasing trend, dropping from 0.34 as of December 31, 2022, to 0.31 as of December 31, 2023. This suggests that Boeing Co.'s ability to meet its short-term obligations with its most liquid assets has deteriorated.

Furthermore, the cash ratio, which focuses solely on the ability to cover current liabilities with cash and cash equivalents, has also exhibited a downward trend, decreasing from 0.22 as of December 31, 2022, to 0.19 as of December 31, 2023.

Overall, the decreasing trend in these liquidity ratios indicates a potential concern regarding Boeing Co.'s ability to meet its short-term financial obligations with its current assets and cash on hand. This may warrant further analysis to understand the underlying reasons for the decreasing liquidity position and its potential impact on the company's financial health.

See also:

The Boeing Company Liquidity Ratios (Quarterly Data)

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 2.78 6.07 7.78 11.38 10.64 18.42 23.32 25.51 24.44 16.85 12.85 10.73 4.46 0.65 4.70 -2.42 -9.48 -10.87 -12.03 -8.31

The cash conversion cycle (CCC) of Boeing Co. has fluctuated over the past eight quarters, indicating variations in its ability to convert its investments in inventory and accounts receivable into cash. The CCC measures the time it takes for a company to convert its investments in inventory and accounts receivable into cash flows from sales. A lower CCC is more favorable as it signifies a shorter time to convert investments into cash.

From March 2022 to December 2023, the CCC has ranged from 404.51 days to 509.25 days. This suggests that Boeing has experienced challenges in efficiently managing its cash conversion process. The increase in the CCC from March 2023 to March 2022 indicates that the company took longer to convert its investments into cash. However, the CCC decreased in the subsequent quarters, showing some improvement in efficiency.

It is essential for Boeing to closely monitor and manage its inventory levels and accounts receivable practices to enhance its cash conversion cycle. This could involve optimizing production processes, improving inventory turnover, and implementing effective credit and collection policies. Overall, the company should focus on efforts to shorten its cash conversion cycle to free up cash and improve its overall liquidity position.