Lear Corporation (LEA)
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 | 1.32 | 1.33 | 1.34 | 1.33 | 1.35 | 1.36 | 1.36 | 1.35 | 1.35 | 1.33 | 1.33 | 1.36 | 1.42 | 1.33 | 1.41 | 1.36 | 1.33 | 1.31 | 1.26 | 1.29 |
| Quick ratio | 0.19 | 0.13 | 0.16 | 0.16 | 0.21 | 0.17 | 0.16 | 0.16 | 0.22 | 0.16 | 0.17 | 0.23 | 0.28 | 0.22 | 0.29 | 0.27 | 0.26 | 0.25 | 0.37 | 0.46 |
| Cash ratio | 0.19 | 0.13 | 0.16 | 0.16 | 0.21 | 0.17 | 0.16 | 0.16 | 0.22 | 0.16 | 0.17 | 0.23 | 0.28 | 0.22 | 0.29 | 0.27 | 0.26 | 0.25 | 0.37 | 0.46 |
Lear Corporation's current ratio has shown a relatively stable trend over the past few years, ranging between 1.26 and 1.42. This indicates that the company has generally been able to meet its short-term obligations with its current assets.
On the other hand, the quick ratio, which excludes inventory from current assets, has been more volatile, fluctuating between 0.13 and 0.29. This suggests that Lear Corporation may have had some difficulty in meeting its short-term obligations without relying on inventory in certain periods.
The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has also shown fluctuations between 0.13 and 0.46. This implies that Lear Corporation may have had varying levels of cash on hand to cover its immediate liabilities.
Overall, while the current ratio indicates that Lear Corporation has generally maintained a reasonable level of liquidity, the quick and cash ratios suggest that the company's ability to meet its short-term obligations without relying on inventory or other current assets may have been more strained at times.
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 | 26.94 | 29.60 | 28.26 | 28.87 | 29.49 | 30.62 | 29.85 | 30.58 | 29.48 | 30.48 | 32.22 | 33.49 | 32.10 | 35.72 | 31.44 | 32.06 | 32.09 | 29.53 | 29.23 | 27.61 |
The cash conversion cycle of Lear Corporation has exhibited fluctuations over the reporting periods from March 31, 2020, to December 31, 2024. The cash conversion cycle, a measure of how quickly a company can convert its resources into cash flows, stood at 27.61 days on March 31, 2020, indicating a relatively efficient cash conversion process at the beginning of the analyzed period.
However, the cycle increased gradually to 35.72 days by September 30, 2021, suggesting a lengthening period between the company's outlay of cash for raw materials and the receipt of cash from sales. Subsequently, there was a moderate decline in the cash conversion cycle, reaching 26.94 days by December 31, 2024, reflecting an improvement in the efficiency of Lear Corporation's working capital management.
Overall, Lear Corporation has demonstrated fluctuations in its cash conversion cycle, with periods of both increases and decreases. It is crucial for the company to closely monitor and manage its working capital effectively to ensure optimal cash flow efficiency and liquidity in its operations.