Altria Group (MO)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.51 | 0.49 | 0.84 | 0.71 | 0.79 |
| Quick ratio | 0.36 | 0.33 | 0.47 | 2.10 | 2.70 |
| Cash ratio | 0.36 | 0.33 | 0.47 | 2.10 | 2.70 |
The current ratio of Altria Group, a measure of short-term liquidity, has fluctuated over the years. Starting at 0.79 in 2020, the ratio decreased to 0.71 in 2021 before recovering slightly to 0.84 in 2022. However, there was a significant drop to 0.49 in 2023 and a further decline to 0.51 in 2024. This trend indicates that the company may be facing challenges in meeting its short-term obligations as its current assets may not be sufficient to cover its current liabilities.
The quick ratio, another liquidity measure that excludes inventory from current assets, also shows a similar downward trend. Starting at a strong 2.70 in 2020, the ratio declined to 2.10 in 2021 before plummeting to 0.47 in 2022. It then further dropped to 0.33 in 2023 and slightly improved to 0.36 in 2024. These declining quick ratios suggest that Altria's ability to meet its short-term obligations without relying on inventory may be weakening, reflecting potential liquidity challenges.
The cash ratio, a more stringent liquidity measure that only considers cash and cash equivalents, mirrors the trends seen in the current and quick ratios. The ratio also started at 2.70 in 2020 but plummeted to 0.47 in 2022 and further dropped to 0.33 in 2023, before stabilizing at 0.36 in 2024. This indicates that the company might be relying more on sources other than cash to meet its short-term obligations, potentially putting strain on its liquidity position.
Overall, the declining trend in Altria Group's liquidity ratios over the years suggests potential challenges in meeting its short-term obligations and managing its cash and liquid assets efficiently. Investors and stakeholders may need to closely monitor the company's liquidity position and management strategies to assess its financial health and sustainability.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 64.87 | 43.48 | 66.86 | 61.22 | 91.79 |
The cash conversion cycle for Altria Group has shown fluctuations over the years, indicating changes in the company's efficiency in managing its working capital.
In 2020, the cash conversion cycle was 91.79 days, which improved to 61.22 days in 2021, suggesting a more efficient conversion of inventory to cash during that period. However, in 2022, the cycle increased to 66.86 days, indicating a slowdown in the company's cash conversion process.
The cycle decreased significantly to 43.48 days in 2023, reflecting a notable improvement in Altria's ability to convert its resources into cash more swiftly. However, in 2024, the cycle increased to 64.87 days, suggesting a moderate decline in efficiency compared to the previous year.
Overall, fluctuations in the cash conversion cycle of Altria Group over the years may signify changes in the company's operational effectiveness and working capital management strategies. It is essential for the company to monitor and analyze these trends to optimize its cash flow and overall financial performance.