L3Harris Technologies Inc (LHX)

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 1.08 1.04 0.90 0.96 0.99 0.88 1.09 1.14 1.17 1.10 1.27 1.32 1.40 1.54 1.70 1.78 1.57 1.37 1.51 1.41
Quick ratio 0.08 0.07 0.06 0.06 0.07 0.06 0.06 0.09 0.15 0.09 0.09 0.08 0.21 0.26 0.45 0.23 0.30 0.29 0.42 0.13
Cash ratio 0.08 0.07 0.06 0.06 0.07 0.06 0.06 0.09 0.15 0.09 0.09 0.08 0.21 0.26 0.45 0.23 0.30 0.29 0.42 0.13

The liquidity ratios of L3Harris Technologies Inc, as indicated by the current ratio, have shown a declining trend over the past few years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, decreased from 1.41 on March 31, 2020, to 1.08 on December 31, 2024. This downward trend could indicate potential liquidity challenges for the company.

On the other hand, the quick ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets, also displayed a decrease over the years. The quick ratio declined from 0.13 on March 31, 2020, to 0.08 on December 31, 2024. This trend suggests a diminished ability to cover immediate financial obligations without relying on inventory.

Similarly, the cash ratio, which focuses solely on the ability to cover short-term liabilities with cash and cash equivalents, exhibited a downward trajectory. The cash ratio decreased from 0.13 on March 31, 2020, to 0.08 on December 31, 2024. This decline may indicate a reduced capacity to settle short-term debts using readily available cash resources.

Overall, the decreasing trend in all three liquidity ratios suggests that L3Harris Technologies Inc may be facing challenges in meeting its short-term financial obligations with its current asset base. It is vital for the company to closely monitor its liquidity position and take necessary steps to improve its short-term financial health to ensure operational stability and minimize liquidity risks.

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 29.98 31.91 33.22 35.73 37.51 43.62 43.16 44.71 38.83 41.17 38.58 32.92 28.82 29.56 24.72 25.78 27.56 24.89 23.75 32.13

The cash conversion cycle for L3Harris Technologies Inc has shown fluctuations over the reported periods. It started at 32.13 days on March 31, 2020, decreased to 23.75 days by June 30, 2020, and stayed relatively stable around 24-28 days until March 31, 2022.

There was a notable increase in the cash conversion cycle from June 30, 2022, to March 31, 2023, reaching a peak of 44.71 days, indicating a lengthier period to convert resources into cash. The cycle slightly decreased from June 30, 2023, to December 31, 2024, ranging from 29.98 to 43.62 days.

Overall, the cash conversion cycle measures the time it takes for L3Harris Technologies Inc to convert its investments in operations and inventory back into cash. A longer cycle may suggest inefficiencies in managing working capital, while a shorter cycle indicates better liquidity and efficient operations.