GE Aerospace (GE)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 12,685,000 | 15,736,000 | 14,446,000 | 15,100,000 | 36,119,000 |
| Short-term investments | US$ in thousands | 982,000 | 5,706,000 | 7,609,000 | 12,297,000 | 218,000 |
| Receivables | US$ in thousands | 9,327,000 | 8,703,000 | 14,831,000 | 15,620,000 | 16,691,000 |
| Total current liabilities | US$ in thousands | 34,392,000 | 32,103,000 | 49,428,000 | 51,953,000 | 54,613,000 |
| Quick ratio | 0.67 | 0.94 | 0.75 | 0.83 | 0.97 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($12,685,000K
+ $982,000K
+ $9,327,000K)
÷ $34,392,000K
= 0.67
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1 indicates that a company may have difficulty meeting its short-term liabilities.
Looking at the quick ratio trend for GE Aerospace from December 31, 2020, to December 31, 2024, we observe a decline over the period. In 2020, the quick ratio stood at 0.97, indicating a healthy ability to cover short-term liabilities. However, there has been a consistent decrease in the quick ratio since then, reaching 0.67 by December 31, 2024.
The decreasing trend in the quick ratio could suggest potential liquidity challenges for GE Aerospace in the short term. It may indicate that the company's current assets, excluding inventory, may not be sufficient to cover its current liabilities.
It is important for GE Aerospace to closely monitor its liquidity position and take proactive measures to improve its quick ratio to ensure it can meet its short-term financial obligations effectively. This may involve optimizing cash management, enhancing receivables collection, or reassessing current liabilities to bolster liquidity and financial stability in the future.
Peer comparison
Dec 31, 2024