BorgWarner Inc (BWA)

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	1.79	1.84	1.62	1.54	1.65	1.65	1.62	1.59	1.56	1.72	1.77	1.72	1.74	1.78	1.69	1.68	1.62	2.35	2.36	1.76
Quick ratio	1.35	1.41	1.19	1.13	1.25	1.20	1.11	1.09	0.92	1.21	1.24	1.21	1.25	1.35	1.34	1.39	1.41	2.00	1.80	1.24
Cash ratio	0.57	0.55	0.35	0.28	0.42	0.27	0.20	0.23	0.34	0.33	0.38	0.39	0.48	0.56	0.54	0.59	0.65	1.10	1.02	0.42

Based on the provided data, BorgWarner Inc's liquidity ratios exhibit some fluctuations over the period under review.

1. Current Ratio: The company's current ratio fluctuates between 1.54 and 2.36. The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. A ratio above 1 indicates that the company can pay off its current liabilities using its current assets. BorgWarner's current ratio generally stays above 1, reflecting a generally healthy liquidity position.

2. Quick Ratio: The quick ratio fluctuates between 0.92 and 2.00. The quick ratio is a more stringent measure of liquidity as it excludes inventory from current assets. BorgWarner’s quick ratio also generally remains above 1, indicating a relatively strong ability to meet short-term obligations without relying heavily on inventory.

3. Cash Ratio: The cash ratio ranges from 0.20 to 1.10. This ratio provides insight into the company's ability to cover its current liabilities with its cash and cash equivalents. BorgWarner's cash ratio fluctuates, indicating some variability in the company's ability to cover short-term obligations solely with its cash reserves.

Overall, BorgWarner Inc's liquidity ratios suggest that the company generally maintains a healthy liquidity position, as indicated by current and quick ratios consistently above 1. However, the fluctuations in these ratios over time may warrant further investigation into the company's cash management and short-term liquidity strategies.

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	73.93	85.42	89.01	98.19	104.47	106.21	127.51	125.29	20.15	124.51	123.81	124.39	50.69	112.07	121.45	140.38	154.60	121.25	105.76	103.46

The cash conversion cycle of BorgWarner Inc has shown fluctuations over the years based on the provided data. The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other inputs into cash flows from sales.

From March 31, 2020, to June 30, 2021, the cash conversion cycle ranged from 103.46 days to 121.45 days, showing relatively stable performance. However, there was a significant increase in the cycle to 154.60 days by December 31, 2020, which may indicate inefficiencies in managing inventory, accounts receivable, and accounts payable during that period.

The cycle then decreased gradually and consistently, reaching its lowest point of 20.15 days by December 31, 2022. This substantial improvement suggests that BorgWarner Inc enhanced its operational efficiency in managing working capital, possibly by better inventory management or quicker conversion of sales into cash.

Heading into 2023 and 2024, the cash conversion cycle remained relatively stable around 100 days, indicating continued effective working capital management practices. The downward trend may imply improvements in inventory turnover, collection of accounts receivable, and management of accounts payable.

In conclusion, while BorgWarner Inc experienced some fluctuations in its cash conversion cycle over the years, the overall trend seems positive, with the company efficiently managing its working capital and optimizing cash flow generation from its operations.