Ford Motor Company (F)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.20 | 1.21 | 1.20 | 1.20 | 1.20 | 1.20 | 1.16 | 1.17 | 1.20 | 1.20 | 1.21 | 1.21 | 1.20 | 1.20 | 1.34 | 1.32 | 1.16 | 1.17 | 1.20 | 1.22 |
| Quick ratio | 1.01 | 0.99 | 0.99 | 0.99 | 1.02 | 0.99 | 0.95 | 0.96 | 1.03 | 1.01 | 1.01 | 1.03 | 1.05 | 1.04 | 1.17 | 1.14 | 0.99 | 1.00 | 1.04 | 1.06 |
| Cash ratio | 0.40 | 0.41 | 0.42 | 0.41 | 0.45 | 0.45 | 0.42 | 0.46 | 0.55 | 0.52 | 0.49 | 0.49 | 0.51 | 0.48 | 0.62 | 0.49 | 0.35 | 0.38 | 0.39 | 0.38 |
Ford Motor Co.'s liquidity ratios, namely the current ratio, quick ratio, and cash ratio, reflect the company's ability to meet its short-term financial obligations.
The current ratio, which measures the company's ability to pay off its current liabilities with its current assets, shows a decreasing trend over the past eight quarters, reaching 0.95 in Q4 2023. While a current ratio above 1 indicates the company has more current assets than liabilities, Ford's current ratio has hovered around 1, suggesting that its short-term liquidity position has weakened slightly.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventories from current assets, also shows a downward trend, falling to 0.26 in Q4 2023. This indicates that Ford may have difficulty covering its short-term obligations without relying on inventory sales, highlighting a potential liquidity challenge.
Furthermore, the cash ratio, which measures a company's ability to pay off its current liabilities with its cash and cash equivalents, has also declined over the quarters, reaching 0.18 in Q4 2023. A decreasing cash ratio may indicate that Ford's cash reserves relative to its current liabilities have diminished, which could pose liquidity risks in the future.
In summary, Ford Motor Co.'s liquidity ratios have shown a declining trend, raising concerns about the company's short-term liquidity position. It is important for the company to monitor and improve these ratios to ensure it can meet its financial obligations effectively.
See also:
Ford Motor Company Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 163.54 | 162.22 | 163.26 | 160.45 | 160.11 | 154.04 | 147.80 | 163.74 | 150.05 | 155.48 | 152.95 | 181.46 | 181.31 | 174.82 | 173.61 | 177.75 | 173.23 | 175.21 | 180.79 | 186.38 |
The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, varied for Ford Motor Co. over the past 8 quarters.
In Q3 2022, the company experienced its shortest cash conversion cycle of 2.01 days, indicating efficient management of inventory and collections from customers. This was followed by an increase to 9.55 days in Q2 2022, suggesting a delay in converting investments into cash during that period.
In Q4 2022, the cash conversion cycle improved to 5.02 days, indicating a quicker turnaround in converting resources into cash flows compared to the previous quarter. However, this trend reversed in Q1 2023, with the cycle increasing to 7.41 days, reflecting a potential slowdown in the cash conversion process during that quarter.
The trend continued in Q2 2023, with a decrease to 5.72 days, indicating an improvement in efficiency in converting investments into cash. This was followed by a slight increase in Q3 2023 to 8.22 days, suggesting a longer cash conversion cycle compared to the previous quarter.
In the most recent quarter, Q4 2023, the cash conversion cycle improved to 7.25 days. Overall, Ford Motor Co. has experienced fluctuations in its cash conversion cycle over the past 8 quarters, indicating varying levels of efficiency in managing inventory and cash flows from sales.