Delta Air Lines Inc (DAL)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.37 | 0.39 | 0.50 | 0.76 | 1.09 |
| Quick ratio | 0.24 | 0.26 | 0.37 | 0.65 | 0.97 |
| Cash ratio | 0.12 | 0.15 | 0.25 | 0.54 | 0.89 |
The liquidity ratios of Delta Air Lines Inc, as indicated by the current ratio, quick ratio, and cash ratio, have exhibited a declining trend over the years.
The current ratio, which measures short-term liquidity by comparing current assets to current liabilities, decreased from 1.09 in 2020 to 0.37 in 2024. This indicates that Delta Air Lines may face challenges in meeting its short-term obligations with its current assets.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also decreased significantly from 0.97 in 2020 to 0.24 in 2024. This suggests a decreasing ability of Delta Air Lines to meet its immediate liabilities without relying on selling inventory.
Furthermore, the cash ratio, which specifically measures the company's ability to cover current liabilities with its cash and cash equivalents, declined from 0.89 in 2020 to 0.12 in 2024. This indicates a diminishing ability of Delta Air Lines to settle its short-term obligations solely with its available cash resources.
Overall, the declining trend in Delta Air Lines Inc's liquidity ratios raises concerns about its ability to efficiently manage its short-term financial obligations and highlights the importance of closely monitoring its liquidity position in the future.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -29.89 | -29.14 | -42.20 | -38.24 | -1.39 |
The cash conversion cycle of Delta Air Lines has exhibited fluctuations over the recent years. In 2020, the company had a negative cash conversion cycle of -1.39 days, indicating efficient management of cash inflows and outflows. However, this cycle significantly increased by 36.85 days to -38.24 days by the end of 2021, suggesting a potential delay in converting inventory and receivables into cash.
Subsequently, there was a further increase in the cash conversion cycle to -42.20 days by the end of 2022, which may signify challenges in managing working capital efficiently. However, in the following year, there was a slight improvement as the cycle reduced to -29.14 days by the end of 2023.
Overall, the cash conversion cycle for Delta Air Lines remained negative during the period under review, indicating a generally good position in converting its resources into cash. Nevertheless, the fluctuations observed highlight the importance of continuous monitoring and improvement in the company's working capital management practices.