Lockheed Martin Corporation (LMT)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,442,000 | 2,547,000 | 3,604,000 | 3,160,000 | 1,514,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 16,937,000 | 15,887,000 | 13,997,000 | 13,933,000 | 13,972,000 |
| Cash ratio | 0.09 | 0.16 | 0.26 | 0.23 | 0.11 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,442,000K
+ $—K)
÷ $16,937,000K
= 0.09
The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. Looking at Lockheed Martin Corp.'s cash ratio over the past five years, we can observe a general downward trend. In 2019, the ratio was at 0.80, which increased to 0.99 in 2020, then decreased to 0.97 in 2022, and further to 0.90 in 2023.
The declining trend in the cash ratio may indicate a decrease in the company's ability to cover its short-term obligations with its available cash and equivalents. This could be a cause for concern as it may imply potential liquidity challenges over time.
Further analysis of the company's cash flow and liquidity management practices would be necessary to understand the factors driving these changes in the cash ratio. It's important to assess how Lockheed Martin is managing its cash position and whether there are any significant changes in its operating or investing activities impacting its liquidity position.