CF Industries Holdings Inc (CF)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 3.81 | 3.69 | 1.81 | 1.51 | 1.46 |
| Quick ratio | 3.17 | 3.19 | 1.52 | 1.13 | 0.82 |
| Cash ratio | 2.54 | 2.60 | 1.18 | 0.84 | 0.46 |
CF Industries Holdings Inc has shown consistent improvement in its liquidity ratios over the past five years.
The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has been increasing steadily. From 2019 to 2023, the current ratio improved from 1.46 to 3.81, indicating that the company's liquidity position has strengthened significantly.
Similarly, the quick ratio, also known as the acid-test ratio, reflects the company's ability to cover immediate liabilities with its most liquid assets. CF Industries Holdings Inc's quick ratio has also shown a positive trend, increasing from 0.94 in 2019 to 3.44 in 2023. This suggests that the company has a strong ability to meet short-term obligations without relying on inventory.
The cash ratio, which is the most conservative liquidity ratio, evaluates the company's ability to cover current liabilities with its cash and cash equivalents alone. CF Industries Holdings Inc's cash ratio has improved consistently over the years, rising from 0.57 in 2019 to 2.81 in 2023, indicating a significant enhancement in the company's cash position.
Overall, CF Industries Holdings Inc's liquidity ratios demonstrate a robust liquidity position, with the company being well-equipped to meet its short-term obligations and efficiently manage its working capital.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 44.32 | 47.16 | 53.95 | 45.64 | 48.41 |
The cash conversion cycle of CF Industries Holdings Inc has shown fluctuations over the past five years.
In 2023, the company's cash conversion cycle decreased to 44.32 days from 47.16 days in 2022. This indicates a more efficient management of its working capital as the company took fewer days to convert its inventory into cash during the year.
Compared to 2021 when the cash conversion cycle was 53.95 days, the company improved its efficiency in 2023.
Similarly, in 2020 and 2019, the cash conversion cycle was 45.64 and 48.41 days respectively, showing some variability in the company's working capital management during those years.
Overall, the trend in the cash conversion cycle of CF Industries Holdings Inc reflects fluctuations, but the recent decrease in 2023 is a positive sign of improved efficiency in managing its operating cycle.