Lear Corporation (LEA)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,196,300 | 1,114,900 | 1,318,300 | 1,306,700 | 1,487,700 |
| Short-term investments | US$ in thousands | 4,800 | 3,600 | 3,500 | 9,300 | 17,100 |
| Receivables | US$ in thousands | 3,681,200 | 3,451,900 | 3,041,500 | 3,269,200 | 2,982,600 |
| Total current liabilities | US$ in thousands | 5,667,200 | 5,188,300 | 4,759,900 | 5,076,700 | 4,666,200 |
| Quick ratio | 0.86 | 0.88 | 0.92 | 0.90 | 0.96 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,196,300K
+ $4,800K
+ $3,681,200K)
÷ $5,667,200K
= 0.86
The quick ratio of Lear Corp. has been relatively stable over the past five years, ranging from 1.04 to 1.10. This indicates that the company has a healthy level of short-term liquidity to cover its immediate liabilities with its most liquid assets. A quick ratio of above 1 suggests that Lear Corp. has an adequate level of current assets, excluding inventory, to meet its short-term obligations.
The slight fluctuations in the quick ratio over the years may be attributed to changes in the composition of current assets and liabilities. A consistent quick ratio above 1 signifies that Lear Corp. is financially capable of meeting its short-term obligations without relying heavily on selling off its inventory.
Overall, the stability of Lear Corp.'s quick ratio indicates a sound financial position in terms of short-term liquidity management. However, it is advisable for the company to continue monitoring and managing its liquidity position to ensure ongoing financial health and sustainability.
Peer comparison
Dec 31, 2023