Ford Motor Company (F)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.16 | 1.20 | 1.20 | 1.20 | 1.20 |
| Quick ratio | 0.98 | 1.01 | 1.02 | 1.03 | 1.05 |
| Cash ratio | 0.36 | 0.40 | 0.45 | 0.55 | 0.51 |
Ford Motor Company's liquidity ratios have shown varied trends over the past five years.
The current ratio has remained relatively stable at around 1.20 from 2020 to 2023, indicating that the company has sufficient current assets to cover its current liabilities. However, there was a slight decrease to 1.16 in 2024, which may raise concern about the company's ability to meet its short-term obligations.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has been gradually decreasing from 1.05 in 2020 to 0.98 in 2024. This downward trend suggests that Ford's ability to meet its short-term obligations without relying on selling inventory has weakened over the years.
The cash ratio, which specifically looks at the company's ability to cover its current liabilities with cash and cash equivalents, has also shown a declining trend from 0.51 in 2020 to 0.36 in 2024. This decrease indicates that Ford's liquidity position relying solely on cash has deteriorated over the years.
Overall, Ford Motor Company's liquidity ratios suggest a mixed performance, with the current ratio remaining stable but the quick ratio and cash ratio showing declining trends, potentially signaling potential liquidity challenges 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 | 162.92 | 163.68 | 160.10 | 150.10 | 181.24 |
The cash conversion cycle of Ford Motor Company has shown fluctuations over the five-year period from December 31, 2020, to December 31, 2024. The cycle decreased from 181.24 days in 2020 to 150.10 days in 2021, indicating an improvement in the company's efficiency in converting its investments in inventory and accounts receivable into cash.
However, in the subsequent years, the cash conversion cycle increased to 160.10 days in 2022, 163.68 days in 2023, and then declined slightly to 162.92 days in 2024. These fluctuations suggest that Ford's management may be facing challenges in managing its working capital effectively, potentially leading to delays in converting its assets into cash.
Overall, Ford Motor Company should focus on optimizing its cash conversion cycle by streamlining its operations, improving inventory management, and accelerating accounts receivable collections to enhance its liquidity position and operational efficiency.