The Mosaic Company (MOS)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.08 | 1.22 | 1.18 | 1.11 | 1.12 |
| Quick ratio | 0.33 | 0.42 | 0.44 | 0.48 | 0.68 |
| Cash ratio | 0.07 | 0.09 | 0.13 | 0.16 | 0.40 |
The Mosaic Company's liquidity ratios have shown some fluctuations over the past five years.
1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its current assets. The current ratio for The Mosaic Company has generally been above 1, indicating that it has typically had sufficient current assets to cover its short-term obligations. However, the ratio decreased slightly from 1.12 in 2020 to 1.08 in 2024. Despite this decrease, the company's current ratio has remained above 1, suggesting a relatively healthy liquidity position.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. The quick ratio for The Mosaic Company has shown a decreasing trend from 0.68 in 2020 to 0.33 in 2024. This declining trend indicates that the company's ability to meet its short-term obligations with its most liquid assets (excluding inventory) has weakened over the years.
3. Cash Ratio: The cash ratio measures the company's ability to cover its current liabilities with its cash and cash equivalents alone. The cash ratio for The Mosaic Company has steadily declined from 0.40 in 2020 to 0.07 in 2024. This indicates that the company's reliance on cash and cash equivalents to meet its short-term obligations has decreased significantly, which could potentially raise concerns about its liquidity position.
Overall, The Mosaic Company's liquidity ratios suggest that while the current ratio has remained relatively stable above 1, the quick ratio and cash ratio have shown a declining trend over the years. This implies that the company may be facing challenges in meeting its short-term obligations using its most liquid assets, especially cash and cash equivalents. Further analysis and monitoring of the company's liquidity position may be warranted to assess its ability to meet its financial obligations in the short term.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 89.39 | 76.93 | 93.89 | 104.27 | 83.53 |
The cash conversion cycle for The Mosaic Company has shown fluctuations over the years based on the provided data.
- As of December 31, 2020, the cash conversion cycle stood at 83.53 days.
- By December 31, 2021, the cycle had increased to 104.27 days, indicating a longer period to convert resources into cash.
- There was a slight improvement by December 31, 2022, with the cycle decreasing to 93.89 days.
- A significant reduction was observed by December 31, 2023, as the cycle decreased to 76.93 days.
- However, by December 31, 2024, the cash conversion cycle increased again to 89.39 days.
Overall, these fluctuations in the cash conversion cycle reflect changes in The Mosaic Company's efficiency in managing its cash flows, inventory, and receivables over the years. More stable and shorter cycles generally indicate better liquidity management and operational efficiency. The company may need to focus on streamlining its processes to ensure a more consistent and optimal cash conversion cycle.