Cleveland-Cliffs Inc (CLF)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 198,000 | 26,000 | 48,000 | 112,000 | 353,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 1,840,000 | 1,960,000 | 2,157,000 | 1,193,000 | 152,600 |
| Total current liabilities | US$ in thousands | 3,508,000 | 3,549,000 | 3,561,000 | 2,929,000 | 409,000 |
| Quick ratio | 0.58 | 0.56 | 0.62 | 0.45 | 1.24 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($198,000K
+ $—K
+ $1,840,000K)
÷ $3,508,000K
= 0.58
The quick ratio of Cleveland-Cliffs Inc has shown a declining trend over the past five years, decreasing from 1.42 in 2019 to 0.62 in 2023. This indicates a weakening ability of the company to meet its short-term obligations using its most liquid assets. The ratio was highest in 2021 at 0.69 but has since decreased.
A quick ratio below 1 suggests that the company may have difficulty meeting its current liabilities with its quick assets alone. A higher quick ratio is generally preferred as it indicates a stronger liquidity position. The decreasing trend in the quick ratio of Cleveland-Cliffs Inc raises concerns about its ability to efficiently cover its short-term liabilities. Further investigation into the company's current asset composition and management of its liquidity may be warranted to address this downward trend.
Peer comparison
Dec 31, 2023