Avis Budget Group Inc (CAR)

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 0.75 0.70 0.86 0.76 0.80 0.81 0.79 0.72 0.73 0.72 0.75 0.65 0.77 0.91 0.54 0.85 0.87 1.22 1.07 0.85
Quick ratio 0.20 0.18 0.18 0.17 0.21 0.21 0.20 0.20 0.22 0.21 0.21 0.20 0.22 0.35 0.54 0.26 0.34 0.72 0.60 0.30
Cash ratio 0.20 0.18 0.18 0.17 0.21 0.21 0.20 0.20 0.22 0.21 0.21 0.20 0.22 0.35 0.54 0.26 0.34 0.72 0.60 0.30

The current ratio of Avis Budget Group Inc has shown fluctuations over the periods analyzed, generally ranging between 0.54 and 1.22. The ratio improved from June 2022 to September 2023, indicating better short-term liquidity. However, it decreased slightly by December 2023 and remained relatively stable thereafter. A ratio below 1 may suggest potential difficulties in meeting short-term obligations with current assets alone.

The quick ratio, which excludes inventory from current assets, also witnessed variability, falling between 0.17 and 0.72. This ratio indicates a company's ability to pay off its current liabilities without relying on the sale of inventory. A decrease in the quick ratio from June 2022 to March 2024 may imply a reduced ability to cover immediate liabilities with highly liquid assets.

The cash ratio, reflecting the most liquid assets to cover current liabilities, showed a similar trend to the quick ratio, ranging between 0.17 and 0.72. Maintaining a healthy cash ratio is crucial for meeting short-term obligations with readily available funds. Avis Budget Group Inc may need to focus on increasing cash reserves to enhance its ability to cover short-term obligations.

Overall, Avis Budget Group Inc's liquidity ratios indicate some fluctuations and potential challenges in maintaining adequate short-term liquidity levels, particularly in the periods where the ratios fell below 1. Continuous monitoring and strategies to increase liquidity may be necessary to strengthen the company's financial position.

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 0.00 0.00 0.00 18.62 0.00 0.00 0.00 0.00 74.78 78.68 85.50 65.59 49.55 52.32 0.00 50.48 34.59 33.72 27.08 29.74

The cash conversion cycle of Avis Budget Group Inc has shown fluctuations over the years, indicating changes in the efficiency of the company's cash management.

From March 31, 2020, to December 31, 2022, the cash conversion cycle ranged between approximately 27 to 85 days. This signifies variations in the time taken by Avis Budget Group to convert its investments in inventory and other resources into cash receipts from customers.

Notably, there were periods where the cash conversion cycle dropped to zero days, suggesting that the company was able to swiftly convert its investments into cash inflows. However, this improvement was not sustained consistently, as the cycle increased again in subsequent periods.

The peak observed in the cash conversion cycle on June 30, 2022, at 85.50 days should be a point of analysis for the company to understand the factors leading to such a delay in cash conversion. Additionally, the lower cycle in the following periods could indicate effective strategies put in place to streamline operations and enhance cash collection efficiency.

Overall, a lower cash conversion cycle indicates better liquidity and working capital management, while a higher cycle may suggest inefficiencies in managing resources. Continuous monitoring and strategic adjustments based on these metrics are crucial for Avis Budget Group to maintain optimal cash flow performance.