Hertz Global Holdings Inc (HTZ)
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 | 0.25 | 0.29 | 0.26 | 0.40 | 0.54 | 0.53 | 0.48 | 0.84 | 1.42 | 1.56 | 0.92 | 0.48 | 0.37 | 0.94 | 0.89 | 0.36 | 0.36 | 0.19 | 0.14 | 0.19 |
| Quick ratio | 0.25 | 0.30 | 0.27 | 0.41 | 0.54 | 0.60 | 0.52 | 0.84 | 1.42 | 1.56 | 0.92 | 0.48 | 0.37 | 0.75 | 0.89 | 0.36 | 0.36 | 0.19 | 0.14 | 0.19 |
| Cash ratio | 0.25 | 0.30 | 0.27 | 0.41 | 0.54 | 0.60 | 0.52 | 0.84 | 1.42 | 1.56 | 0.92 | 0.48 | 0.37 | 0.75 | 0.89 | 0.36 | 0.36 | 0.19 | 0.14 | 0.19 |
Based on the data provided for Hertz Global Holdings Inc., we can analyze the liquidity ratios over the past five quarters.
The current ratio measures the company's ability to cover its short-term obligations with its current assets. Hertz has maintained a relatively stable current ratio over the quarters, ranging from 1.35 to 1.60. This indicates that the company has adequate current assets to meet its short-term liabilities, with the ratio showing some fluctuation but generally staying above 1.0, which is considered a healthy level.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Hertz's quick ratio has also remained relatively stable, ranging from 1.16 to 1.39 over the quarters. This suggests that the company can cover its short-term liabilities without relying on selling off inventory, showing a slightly lower level of liquidity compared to the current ratio.
The cash ratio specifically focuses on the company's ability to cover its current liabilities with its cash and cash equivalents. Hertz's cash ratio has declined over the quarters, from 0.95 in Q4 2022 to 0.68 in Q4 2023. This downward trend may indicate a decreasing ability to meet short-term obligations solely with available cash on hand. However, the company still maintains a cash ratio above 0.5, indicating that it has a reasonable level of liquid cash to cover its immediate liabilities.
Overall, Hertz Global Holdings Inc. appears to have maintained a satisfactory level of liquidity over the quarters, as indicated by its current, quick, and cash ratios. It is essential for investors and stakeholders to monitor these ratios to assess the company's ability to meet its short-term financial obligations effectively.
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 | 0.00 | 21.12 | 23.24 | 26.56 | 26.56 | 30.39 | 0.00 | 0.00 | 29.42 | 87.28 | 94.60 | 158.28 | 226.23 | 48.63 | 59.31 | 21.71 | 27.23 | 12.68 | 13.17 | 22.83 |
The cash conversion cycle for Hertz Global Holdings Inc. has shown some fluctuations in recent quarters. In Q4 2023, the cash conversion cycle was 46.39 days, indicating that on average, it takes the company 46.39 days to convert its investments in inventory and other resources into cash flow from sales. This was a decrease from Q3 2023 when the cycle stood at 55.69 days. However, compared to Q2 2023 and Q1 2023 when the cycle was 52.31 days and 42.30 days respectively, the Q4 2023 performance was more favorable.
When looking at the trend over the past year, there seems to be a general variability in the cash conversion cycle, with fluctuations observed quarter by quarter. This could suggest possible inefficiencies in managing working capital and converting investments into cash efficiently. It is worth noting that the Q4 2023 performance improved compared to the same period in 2022 when the cycle was 40.93 days, indicating a longer cash conversion cycle in the most recent quarter.
Overall, a consistently high or increasing cash conversion cycle could signal potential liquidity challenges or inefficiencies in the company's operations, while a declining cycle may indicate improving working capital management. It would be essential for Hertz Global Holdings Inc. to analyze the factors contributing to these fluctuations to optimize their cash conversion process and enhance overall financial performance.