Howmet Aerospace Inc (HWM)
Quick ratio
| 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 | US$ in thousands | 610,000 | 424,000 | 535,000 | 537,000 | 791,000 | 453,000 | 537,000 | 520,000 | 720,000 | 724,000 | 715,000 | 1,238,000 | 1,610,000 | 1,365,000 | 1,281,000 | 2,591,000 | 1,577,000 | 1,321,000 | 1,357,000 | 1,319,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 71,000 | — | — | — |
| Receivables | US$ in thousands | 692,000 | 727,000 | 671,000 | 671,000 | 537,000 | 600,000 | 550,000 | 529,000 | 420,000 | 465,000 | 416,000 | 435,000 | 598,000 | 430,000 | 527,000 | 1,534,000 | 1,451,000 | 1,773,000 | 1,795,000 | 1,816,000 |
| Total current liabilities | US$ in thousands | 1,784,000 | 1,454,000 | 1,410,000 | 1,403,000 | 1,482,000 | 1,381,000 | 1,322,000 | 1,255,000 | 1,253,000 | 1,208,000 | 1,227,000 | 1,680,000 | 1,660,000 | 1,577,000 | 1,658,000 | 4,107,000 | 4,125,000 | 4,460,000 | 3,621,000 | 3,659,000 |
| Quick ratio | 0.73 | 0.79 | 0.86 | 0.86 | 0.90 | 0.76 | 0.82 | 0.84 | 0.91 | 0.98 | 0.92 | 1.00 | 1.33 | 1.14 | 1.09 | 1.00 | 0.75 | 0.69 | 0.87 | 0.86 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($610,000K
+ $—K
+ $692,000K)
÷ $1,784,000K
= 0.73
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 of 1 or higher is generally considered healthy as it indicates that the company has enough liquid assets to cover its short-term liabilities.
Looking at the quick ratio of Howmet Aerospace Inc over the past 8 quarters, we can observe fluctuations in the ratio. In Q1 2022, the quick ratio was at a strong 1.04, indicating a healthy liquidity position. However, in subsequent quarters, the quick ratio dipped below 1, suggesting a potential strain on the company's ability to meet its short-term obligations with its current liquid assets.
Specifically, in Q4 2023, the quick ratio was 0.87, the lowest among the quarters shown. This indicates that Howmet Aerospace Inc may have had difficulty meeting its short-term obligations with its readily available assets in that period.
It is important for investors and analysts to monitor the quick ratio trend over time to assess the company's liquidity position and its ability to weather short-term financial challenges. A sustained quick ratio below 1 may raise concerns about the company's liquidity management and ability to cover immediate liabilities without having to rely on selling long-term assets or accessing external financing.
Peer comparison
Dec 31, 2023