Cleveland-Cliffs Inc (CLF)

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 2.08 1.85 1.87 1.90 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
Quick ratio 0.49 0.50 0.57 0.56 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
Cash ratio 0.02 0.01 0.03 0.01 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

The analysis of Cleveland-Cliffs Inc's liquidity ratios reveals the following trends over the period:

1. Current Ratio: Cleveland-Cliffs Inc's current ratio has fluctuated over the period but generally indicates a healthy liquidity position. The ratio was above 2 for most of the time, reaching a peak of 2.55 in June 2020. Although there was a slight decrease in the ratio towards the end of the period, it remained above 2, indicating the company's ability to meet its short-term obligations with its current assets.

2. Quick Ratio: The quick ratio of Cleveland-Cliffs Inc also fluctuated during the period, but it generally remained relatively stable compared to the current ratio. It was below 1 for most of the time, indicating that the company may have had difficulty meeting its immediate short-term obligations using only its most liquid assets. However, the quick ratio improved slightly towards the end of the period, suggesting a better ability to cover short-term liabilities without relying on inventory.

3. Cash Ratio: Cleveland-Cliffs Inc's cash ratio indicates the company's ability to cover its current liabilities with cash and cash equivalents alone. The ratio remained low throughout the period, mostly below 0.1. This suggests that the company may have had limited liquidity in terms of cash holdings to cover its short-term obligations. However, there were slight improvements in the cash ratio in some quarters, indicating a better cash position.

Overall, while the current ratio of Cleveland-Cliffs Inc suggests a comfortable liquidity position, the quick and cash ratios highlight potential areas for further monitoring and improvement to ensure the company's ability to meet its short-term liabilities without disruptions.

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 86.67 69.25 67.83 72.19 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

The cash conversion cycle of Cleveland-Cliffs Inc has shown a decreasing trend over the past few years, indicating improved efficiency in managing its working capital. The company's cash conversion cycle, which represents the time it takes to convert raw materials into cash receipts from sales, decreased from 384.76 days on March 31, 2020, to 67.83 days on June 30, 2024.

A lower cash conversion cycle suggests that Cleveland-Cliffs is managing its inventory, accounts receivable, and accounts payable more effectively. This improvement can lead to increased liquidity and better cash flow management for the company.

The downward trend in the cash conversion cycle indicates that Cleveland-Cliffs has been able to optimize its operations, reduce the time it takes to generate cash from its operations, and potentially enhance its profitability. This efficiency could be attributed to better inventory management, quicker collection of receivables, and extending payment terms with suppliers.

Overall, the decreasing cash conversion cycle of Cleveland-Cliffs Inc reflects a positive trend in the company's working capital management and operational efficiency, which can have a favorable impact on its financial performance and liquidity position in the future.