Cleveland-Cliffs Inc (CLF)

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 1.89 2.11 2.10 2.15 2.09 2.33 2.20 2.28 2.15 2.18 2.20 2.00 1.81 2.17 2.55 2.24 2.20 2.32 2.56 2.86
Quick ratio 0.58 0.65 0.68 0.66 0.56 0.66 0.66 0.72 0.62 0.73 0.72 0.60 0.45 0.59 0.60 0.59 1.24 1.36 1.44 1.44
Cash ratio 0.06 0.01 0.01 0.02 0.01 0.02 0.01 0.01 0.01 0.01 0.02 0.04 0.04 0.05 0.07 0.14 0.86 0.87 0.86 1.09

Cleveland-Cliffs Inc's liquidity ratios indicate the company's ability to meet its short-term financial obligations. The current ratio has been gradually decreasing over the past eight quarters, from 2.33 in Q3 2022 to 1.89 in Q4 2023. This suggests a potential weakening in the company's ability to cover its current liabilities with its current assets.

The quick ratio, which excludes inventory from current assets, also shows a declining trend from 0.78 in Q3 2022 to 0.62 in Q4 2023. This indicates that the company may have difficulty meeting its short-term obligations without relying on its inventory.

The cash ratio, which is the most stringent measure of liquidity, fluctuates over the quarters but remains relatively low, with the Q4 2023 ratio at 0.10. This implies that Cleveland-Cliffs Inc holds a limited amount of cash compared to its current liabilities, potentially indicating a lower ability to cover its immediate obligations with cash on hand.

Overall, while the company's current ratio suggests a healthy liquidity position, the decreasing trend in both the current and quick ratios, along with the consistently low cash ratio, raise concerns about Cleveland-Cliffs Inc's liquidity risk and ability to handle short-term financial pressures. Further analysis and monitoring of the company's liquidity management may be warranted.

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 70.73 78.18 82.18 82.77 82.05 93.99 101.10 112.37 107.57 118.05 140.75 156.69 230.67 172.91 284.47 384.76 59.99 39.04 46.44 55.34

The cash conversion cycle for Cleveland-Cliffs Inc has shown fluctuations over the past eight quarters. The trend indicates that the company's ability to efficiently convert its investments in raw materials and other inputs into cash is varying.

In Q1 2022, the cash conversion cycle was at its highest level of 114.82 days, indicating a longer time taken to convert inputs into cash. Subsequently, there was a visible improvement in the efficiency of the cycle, with a gradual decline in Q2 and Q3 2022. However, in Q4 2022, there was a slight increase to 83.61 days, but it still remained lower than the Q1 2022 levels.

In Q1 2023, there was another increase in the cash conversion cycle to 84.11 days, suggesting a slight delay in the company's ability to convert investments into cash compared to the previous quarter. Despite fluctuations in the following quarters, the cycle generally remained within the range of 72.36 to 83.54 days, indicating a relatively stable performance.

Overall, Cleveland-Cliffs Inc has experienced variations in its cash conversion cycle over the past eight quarters, with fluctuations above and below the 80-day mark. The company should focus on optimizing its working capital management to ensure a more consistent and efficient cash conversion cycle in the future.