GE Aerospace (GE)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.09 1.13 1.14 1.17 1.33 1.17 1.25 1.25 1.18 1.10 1.13 1.19 1.28 1.80 1.81 1.96 1.55 0.97 0.87 0.91
Quick ratio 0.67 0.69 0.68 0.70 0.94 0.71 0.78 0.80 0.75 0.65 0.66 0.73 0.83 0.79 0.78 0.83 0.97 1.59 1.48 1.52
Cash ratio 0.40 0.43 0.43 0.41 0.67 0.40 0.48 0.50 0.45 0.34 0.36 0.43 0.53 0.52 0.50 0.56 0.67 1.15 1.11 1.00

The current ratio for GE Aerospace has shown fluctuations over the years, starting at a relatively low level of 0.91 in March 2020 and gradually improving to reach a peak of 1.96 in March 2021. It has since remained above 1, indicating that the company has more current assets to cover its current liabilities.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also displayed variability. It started at a healthy level above 1.4 in 2020 but dipped below 1 in December 2020, indicating potential difficulties in meeting short-term obligations without relying on inventory liquidation. The ratio has generally been below 1 since then, suggesting a potential need for close monitoring of liquidity.

The cash ratio, measuring the company's ability to cover its current liabilities with its most liquid assets, exhibited a similar trend of decline from 1.00 in March 2020 to 0.40 in December 2024. This trend indicates a decreasing ability to cover short-term obligations solely with cash and cash equivalents.

Overall, while the current ratio has generally been favorable, the decreasing trend in the quick and cash ratios raises concerns about GE Aerospace's liquidity position. Management should closely monitor these ratios to ensure the company can meet its short-term obligations effectively.

See also:

GE Aerospace Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 142.85 121.87 114.18 268.21 88.39 207.75 194.28 178.55 126.07 351.68 255.98 199.52 104.98 168.51 167.76 163.18 158.61 87.44 80.15 115.52

The cash conversion cycle for GE Aerospace has shown fluctuations over the years, indicating its efficiency in managing cash flow through the operating cycle. From March 2020 to December 2024, the cash conversion cycle ranged from 80.15 days to 351.68 days.

The cash conversion cycle represents the time taken to convert inputs (raw materials) into cash received from the sale of finished goods. A shorter cash conversion cycle is generally indicative of better liquidity management and efficiency in operations.

In the analyzed period, GE Aerospace had its lowest cash conversion cycle of 80.15 days in June 2020, suggesting a swift conversion of inventory into sales and cash. On the other hand, the highest cash conversion cycle of 351.68 days was observed in September 2022, indicating possible delays in inventory turnover and collection of receivables.

The company experienced fluctuations in its cash conversion cycle, which could be influenced by factors such as inventory management, accounts receivable collection efficiency, and accounts payable payment terms. It is essential for GE Aerospace to closely monitor and improve its cash conversion cycle to ensure optimal cash flow management and operational efficiency.