General Dynamics Corporation (GD)

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 1.44 1.43 1.39 1.39 1.37 1.34 1.40 1.48 1.43 1.48 1.44 1.35 1.35 1.29 1.27 1.34 1.21 1.11 1.09 1.23
Quick ratio 0.79 0.81 0.80 0.13 0.85 0.16 0.15 0.21 0.94 0.21 0.20 0.12 0.18 0.09 0.14 0.29 0.05 0.06 0.04 0.04
Cash ratio 0.12 0.08 0.07 0.13 0.08 0.16 0.15 0.21 0.12 0.21 0.20 0.12 0.18 0.09 0.14 0.29 0.05 0.06 0.04 0.04

General Dynamics Corp.'s liquidity ratios indicate the firm's ability to meet short-term obligations. The current ratio has shown a consistent improvement over the past eight quarters, ranging from 1.37 to 1.44. This indicates that the company's current assets are sufficiently available to cover its current liabilities, with a higher ratio suggesting a stronger liquidity position.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has generally decreased over the quarters from 0.96 to 0.90. This downward trend may indicate that the company's ability to meet short-term obligations without relying on the sale of inventory has weakened somewhat.

The cash ratio, which is the most conservative liquidity metric, measures the company's ability to pay off current liabilities using only cash and cash equivalents. While the cash ratio has fluctuated over the quarters, it has generally remained at a relatively low level, ranging from 0.17 to 0.31. This suggests that General Dynamics Corp. may have limited liquid cash available compared to its current liabilities.

Overall, the current ratio indicates that General Dynamics Corp. has a comfortable level of liquidity, while the quick ratio and cash ratio suggest that the company may need to manage its short-term cash flows and liquid assets more effectively to ensure continued financial stability.

See also:

General Dynamics Corporation 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 276.59 266.66 244.47 124.97 433.23 352.90 339.38 269.21 362.48 349.58 381.78 348.25 329.60 116.91 78.60 53.35 32.32 37.40 38.53 34.88

The cash conversion cycle of General Dynamics Corp. has shown some fluctuations over the past eight quarters. Typically, a longer cash conversion cycle indicates that the company takes longer to convert its investments in inventory into cash receipts from sales.

In the most recent quarter, Q4 2023, the cash conversion cycle was at 151.20 days, which is slightly higher compared to the previous quarter. This increase suggests that General Dynamics may be experiencing challenges in efficiently managing its inventory, accounts receivable, and accounts payable.

Looking at the trend over the past year, we can see a general increase in the cash conversion cycle from Q1 2022 to Q4 2023, indicating potential inefficiencies in the company's working capital management. However, it is important to note that Q1 and Q2 of 2023 showed a decrease in the cash conversion cycle compared to the previous quarters, indicating some improvement.

Overall, General Dynamics Corp. should focus on optimizing its cash conversion cycle by implementing strategies to shorten the cycle, such as improving inventory management, streamlining accounts receivable processes, and negotiating favorable payment terms with suppliers to enhance cash flow efficiency.