General Motors Company (GM)
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 | 1.08 | 1.14 | 1.15 | 1.10 | 1.10 | 1.14 | 1.15 | 1.11 | 1.10 | 1.08 | 1.10 | 1.08 | 1.01 | 1.11 | 1.12 | 1.07 | 0.88 | 0.96 | 0.96 | 0.94 |
| Quick ratio | 0.41 | 0.50 | 0.50 | 0.46 | 0.49 | 0.52 | 0.49 | 0.48 | 0.48 | 0.45 | 0.50 | 0.50 | 0.46 | 0.58 | 0.58 | 0.59 | 0.35 | 0.40 | 0.41 | 0.41 |
| Cash ratio | 0.28 | 0.36 | 0.35 | 0.31 | 0.34 | 0.35 | 0.34 | 0.33 | 0.39 | 0.33 | 0.39 | 0.38 | 0.36 | 0.46 | 0.48 | 0.51 | 0.27 | 0.32 | 0.29 | 0.27 |
General Motors Company's liquidity ratios indicate its ability to meet short-term obligations and the availability of cash to cover immediate needs.
The current ratio, which measures the company's ability to meet short-term liabilities with short-term assets, has fluctuated over the past eight quarters, ranging from 0.89 to 1.21. This suggests that the company's current assets have at times been relatively insufficient to cover its current liabilities.
The quick ratio, which provides a more stringent assessment by excluding inventory from current assets, also reflects variability, with values ranging from 0.31 to 0.62. This indicates that the company's immediate short-term liquidity position has been fluctuating.
The cash ratio, which measures cash and cash equivalents against current liabilities, has demonstrated similar volatility, with values fluctuating between 0.22 and 0.53. This suggests that the company's ability to cover its short-term liabilities with cash has varied over the period.
Overall, the company's liquidity ratios have exhibited variability, indicating that General Motors Company has experienced fluctuations in its ability to meet short-term obligations and maintain liquid reserves. It is important for the company to closely monitor and manage its liquidity position to ensure it can meet its short-term obligations effectively in the future.
See also:
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 | -1,679.14 | -2,059.21 | -1,993.59 | -2,014.09 | -4,023.76 | -0.29 | 4.23 | -1.25 | -3.44 | 8.28 | -7.57 | -1.86 | -9.61 | 0.93 | 10.22 | -7.67 | -14.25 | -9.10 | -5.12 | 0.94 |
The cash conversion cycle (CCC) is a measure of the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A negative CCC indicates that the company is able to collect cash from sales before paying suppliers, which is generally favorable.
Based on the provided data, General Motors Company's cash conversion cycle has fluctuated over the past eight quarters. Starting with a negative CCC of -2.82 days in March 2022, the company improved its efficiency in collecting cash from sales before paying its suppliers. However, this trend reversed in the following quarters, with the CCC turning positive in June 2022 and September 2022, indicating a longer time to convert investments into cash flows.
This negative trend was then reversed with the company achieving negative CCC values in the subsequent quarters, reaching its peak efficiency with a CCC of -3.80 days in December 2023. This implies that General Motors Company has been successful in minimizing the time it takes to convert its investments in inventory and accounts receivable into cash generated from sales.
However, it's important to note that a consistently negative CCC may also indicate aggressive cash management, potentially impacting relationships with suppliers and the sustainability of such practices. Therefore, it would be beneficial for General Motors Company to maintain a balanced approach to cash management to ensure long-term stability and business relationships.