Caterpillar Inc (CAT)

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 1.35 1.45 1.33 1.43 1.39 1.41 1.45 1.44 1.46 1.61 1.56 1.60 1.53 1.54 1.50 1.42 1.47 1.44 1.43 1.43
Quick ratio 0.80 0.84 0.75 0.80 0.79 0.84 0.83 0.84 0.89 1.00 1.42 1.50 1.38 1.38 0.59 0.56 0.60 0.55 0.55 0.55
Cash ratio 0.26 0.27 0.22 0.22 0.22 0.28 0.23 0.22 0.31 0.36 0.79 0.85 0.73 0.75 0.35 0.27 0.31 0.29 0.27 0.26

Caterpillar Inc.'s liquidity ratios reflect its ability to meet short-term obligations and manage cash effectively. The current ratio has shown fluctuations over the past eight quarters, ranging from a low of 0.92 to a high of 1.43. While the current ratio improved in Q1 2023, indicating more assets to cover current liabilities, it declined in subsequent quarters.

The quick ratio, which excludes inventory from current assets, remained relatively stable between 0.36 and 0.41 over the same period. This indicates that Caterpillar may have limited ability to cover its liabilities using only its most liquid assets.

The cash ratio, which measures the company's ability to cover current liabilities with cash and cash equivalents, also varied, ranging from 0.11 to 0.28. The cash ratio increased notably in Q1 2023 compared to previous quarters, suggesting a stronger cash position relative to current liabilities.

Overall, Caterpillar's liquidity ratios highlight some fluctuations in its short-term solvency position. A careful analysis of the company's cash management practices and working capital efficiency may be warranted to ensure it can meet its obligations consistently.


See also:

Caterpillar Inc 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 176.34 184.83 184.40 184.19 176.67 189.06 191.48 191.45 184.90 195.60 204.53 213.50 212.90 208.35 120.14 117.29 104.79 106.27 99.47 102.37

The cash conversion cycle of Caterpillar Inc. has shown fluctuations over the past eight quarters, ranging from 121.31 days in Q4 2022 to 132.16 days in Q3 2023. The trend indicates a slight increase in the time it takes for Caterpillar to convert its investments in inventory and other resources into cash.

The company's cash conversion cycle measures the average number of days it takes for Caterpillar to sell inventory, collect receivables, and pay bills. A higher number of days indicates a longer cash conversion cycle, suggesting that Caterpillar may be taking longer to convert its resources into cash.

It is important for Caterpillar to keep a close eye on its cash conversion cycle as a longer cycle may tie up valuable resources in the form of inventory and accounts receivable, potentially impacting liquidity and cash flow. Continuous monitoring and optimization of this cycle are crucial for efficient working capital management and overall financial health.