International Paper (IP)

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	1.51	1.53	1.59	1.68	1.67	1.75	1.59	1.55	1.35	1.38	1.62	1.73	1.71	2.11	1.42	1.45	1.36	1.33	0.79	0.77
Quick ratio	0.27	0.27	0.25	0.28	0.28	-0.30	-0.38	0.15	0.32	0.21	0.22	0.32	0.37	0.90	0.64	0.67	0.66	0.65	0.10	0.13
Cash ratio	0.27	0.27	0.25	0.28	0.28	-0.30	-0.38	0.15	0.32	0.21	0.22	0.32	0.37	0.90	0.64	0.67	0.66	0.65	0.10	0.13

International Paper's current ratio has shown fluctuations over the past few years, ranging from a low of 0.77 in March 2020 to a peak of 2.11 in September 2021. The current ratio measures the company's ability to cover its short-term liabilities with its current assets, and typically a ratio above 1 indicates a healthy liquidity position. While the current ratio has generally been above 1, which is positive, it has shown some variability.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. International Paper's quick ratio has varied significantly, from a low of -0.38 in June 2023 to a high of 0.90 in September 2021. A quick ratio below 1 may indicate potential difficulty in meeting immediate obligations without relying on inventory sales. The fluctuation in the quick ratio suggests that the company's liquidity position has been volatile.

The cash ratio, which is the most conservative liquidity ratio, focuses only on the ability to cover current liabilities with cash and cash equivalents. International Paper's cash ratio has also shown fluctuations, with values ranging from -0.38 in June 2023 to 0.90 in September 2021. A negative cash ratio indicates a lack of sufficient cash to cover short-term obligations, which could raise concerns about liquidity.

Overall, while International Paper has generally maintained current ratios above 1, indicating a basic level of liquidity, the fluctuations in the quick and cash ratios suggest that the company's ability to meet short-term obligations has been more variable. It is important for investors and analysts to monitor these ratios closely to assess the company's liquidity position accurately over time.

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	46.81	44.80	43.12	45.00	48.18	50.24	48.10	47.35	46.81	47.66	45.47	41.56	43.15	48.84	44.60	46.10	52.06	50.94	50.21	48.44

The cash conversion cycle of International Paper has shown some fluctuations over the period from March 31, 2020, to December 31, 2024. The company's cash conversion cycle indicates the time it takes for International Paper to convert its investments in inventory and other resources into cash inflows from sales.

The trend in the cash conversion cycle shows a peak of 52.06 days on December 31, 2020, followed by a decreasing trend until March 31, 2021, reaching 46.10 days. The cycle continued to decrease until June 30, 2021, where it reached the lowest point of 44.60 days. Thereafter, it showed some fluctuations but remained below 50 days until December 31, 2024.

Overall, the cash conversion cycle of International Paper has been well managed, with efforts to streamline operations and improve efficiency in converting investments into cash inflows. The company's ability to effectively manage its inventory, receivables, and payables is crucial in optimizing its working capital and maintaining financial health.