Ford Motor Company (F)

Ford Motor Co.'s liquidity ratios indicate its ability to meet short-term obligations. The current ratio has fluctuated over the past five years, ranging from 0.90 to 1.00, with a value of 0.95 as of December 31, 2023. This ratio suggests a slight decline in the company's ability to cover its current liabilities with current assets.

The quick ratio, a more stringent measure of liquidity, has also displayed variability over the years, ranging from 0.21 to 0.33. As of December 31, 2023, the quick ratio stands at 0.26, indicating that Ford may face challenges in meeting its short-term obligations without relying on inventory.

The cash ratio, which measures a company's ability to pay off its current liabilities with its most liquid assets, has shown a similar trend to the quick ratio. The ratio has ranged from 0.16 to 0.26 over the past five years, with a value of 0.18 as of December 31, 2023. This suggests that Ford may have a limited capacity to cover its current liabilities solely with cash and cash equivalents.

In conclusion, Ford Motor Co.'s liquidity ratios have exhibited fluctuations, with the current ratio hovering below 1.00 and the quick and cash ratios indicating potential challenges in meeting short-term obligations without considering inventory or other current assets. Investors and stakeholders should monitor these ratios closely to assess Ford's short-term financial health and liquidity risks.

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See also:

Ford Motor Company Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle is a financial metric that evaluates the efficiency of a company's cash flow management. A shorter cycle indicates that the company is able to convert its investment in inventory into cash more quickly.

Looking at the data for Ford Motor Co., we can observe the following trends over the past five years:
- In 2023, the cash conversion cycle increased to 7.25 days from 5.02 days in 2022. This suggests that Ford took slightly longer to convert its inventory into cash in 2023 compared to the previous year.
- In 2021, there was a significant improvement in the cash conversion cycle, which became negative at -2.30 days. This indicates that Ford was able to convert its inventory into cash quickly and efficiently during that period.
- In 2020 and 2019, the cash conversion cycle was also negative, reflecting Ford's ability to manage its cash flow effectively by converting inventory into cash rapidly.

Overall, Ford Motor Co. has shown fluctuations in its cash conversion cycle over the past few years, with some years demonstrating strong cash flow efficiency (such as 2021, 2020, and 2019) and others showing a slight decrease in efficiency (such as 2023 compared to 2022). This metric is important as it reflects how well the company manages its working capital and liquidity through the conversion of inventory into cash.