Crown Holdings Inc (CCK)
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 | 1.15 | 1.13 | 1.30 | 1.30 | 1.18 | 1.24 | 0.95 | 0.99 | 1.09 | 1.10 | 1.57 | 1.23 | 1.15 | 1.19 | 1.15 | 1.31 | 1.03 | 1.12 | 1.17 | 1.20 |
| Quick ratio | 0.72 | 0.65 | 0.69 | 0.66 | 0.61 | 0.62 | 0.48 | 0.50 | 0.59 | 0.74 | 0.52 | 0.65 | 0.63 | 0.67 | 0.57 | 0.72 | 0.55 | 0.59 | 0.60 | 0.59 |
| Cash ratio | 0.31 | 0.20 | 0.15 | 0.11 | 0.14 | 0.09 | 0.08 | 0.08 | 0.13 | 0.41 | 0.13 | 0.16 | 0.27 | 0.17 | 0.11 | 0.24 | 0.16 | 0.09 | 0.09 | 0.09 |
Crown Holdings, Inc.'s liquidity ratios, including the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term obligations.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown fluctuations over the past eight quarters. In Q4 2023 and Q3 2023, the current ratio was 1.15 and 1.13, respectively, indicating that the company had $1.15 and $1.13 in current assets for every $1 in current liabilities. These values suggest a moderate level of liquidity. The current ratio improved in Q2 2023 and Q1 2023 to 1.30, indicating a stronger liquidity position during those periods. However, in Q2 2022 and Q1 2022, the current ratio was below 1, indicating potential liquidity concerns in those quarters.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, shows a similar pattern of fluctuation over the quarters. In Q4 2023, the quick ratio was 0.77, indicating that the company had $0.77 in liquid assets to cover $1 in current liabilities. This ratio has shown improvement compared to the values in Q3 2023 and previous quarters, suggesting a better ability to meet short-term obligations.
The cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, has also varied over the quarters. In Q4 2023, the cash ratio was 0.36, indicating that the company had $0.36 in cash for every $1 in current liabilities. This ratio has shown an increasing trend since Q3 2022, reflecting a stronger cash position.
Overall, while Crown Holdings, Inc. demonstrated fluctuations in its liquidity ratios over the quarters, the improving trends in the current ratio, quick ratio, and cash ratio in the recent quarters suggest an enhanced liquidity position and a better ability to meet short-term obligations.
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 | 26.62 | 36.71 | 44.87 | 48.08 | 30.30 | 38.00 | 29.44 | 36.68 | 14.78 | 27.94 | 29.94 | 37.26 | 17.35 | 35.78 | 36.74 | 33.46 | 9.97 | 31.50 | 37.95 | 38.86 |
The cash conversion cycle for Crown Holdings, Inc. has experienced fluctuations over the past eight quarters. In Q1 2023, the cycle was 45.06 days, signifying a longer time to convert investments in inventory into cash. This was an increase from the previous quarter, indicating potential challenges in managing inventory, receivables, and payables efficiently. However, in Q4 2023, the cycle improved to 19.90 days, representing a more efficient conversion of cash resources.
The company's cash conversion cycle reached its peak in Q2 2023 at 40.99 days, suggesting potential liquidity concerns and inefficiencies in working capital management. Conversely, the cycle was notably lower in Q4 2022 at 25.94 days, indicating a more streamlined process for converting sales into cash.
Overall, monitoring the cash conversion cycle can provide insights into Crown Holdings, Inc.'s operational efficiency and effectiveness in managing cash flows, working capital, and liquidity. The company may benefit from continued efforts to optimize inventory levels, enhance receivables collection processes, and extend payables payments strategically to improve its overall cash conversion cycle.