Motorola Solutions Inc (MSI)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.00 | 1.15 | 1.33 | 1.24 | 1.21 |
| Quick ratio | 0.60 | 0.63 | 0.82 | 0.77 | 0.71 |
| Cash ratio | 0.30 | 0.30 | 0.48 | 0.36 | 0.30 |
The liquidity ratios of Motorola Solutions Inc have shown a declining trend over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has decreased from 1.21 in 2019 to 1.00 in 2023. This downward trend indicates that the company may be facing challenges in meeting its short-term obligations.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also declined from 1.08 in 2019 to 0.85 in 2023. A decreasing quick ratio suggests that Motorola Solutions Inc may have difficulty meeting its immediate obligations without relying on inventory, which may not be easily converted into cash.
Furthermore, the cash ratio, which indicates the company's ability to cover its current liabilities with cash and cash equivalents, has decreased from 0.67 in 2019 to 0.54 in 2023. This declining trend highlights a potential liquidity risk for the company, as it may not have enough cash on hand to meet its short-term obligations.
Overall, the decreasing trend in all three liquidity ratios for Motorola Solutions Inc signals a potential liquidity strain. It is essential for the company to closely monitor its liquidity position and take appropriate actions to ensure it can meet its short-term obligations effectively.
See also:
Motorola Solutions Inc Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 61.93 | 62.63 | 60.63 | 64.19 | 57.89 |
The cash conversion cycle (CCC) of Motorola Solutions Inc has fluctuated over the past five years, indicating changes in the efficiency of its working capital management.
In 2023, the CCC stood at 49.88 days, a slight improvement compared to 2022 (51.33 days). This suggests that the company took slightly less time to convert its investments in inventory and receivables into cash during the year.
The CCC was highest in 2022 among the years presented, indicating that Motorola Solutions took longer to convert its resources into cash, potentially indicating inefficiencies in managing inventory and receivables during that period.
In 2021, the CCC decreased to 35.58 days, representing a significant improvement from the previous year. This indicates that the company was able to streamline its working capital processes and convert its assets into cash more efficiently.
The CCC increased in 2020 (42.73 days) compared to 2019 (34.71 days), suggesting that there might have been challenges in managing cash flows and working capital efficiency during that year.
Overall, fluctuations in Motorola Solutions Inc's cash conversion cycle over the five-year period demonstrate the company's ability to manage its working capital effectively and efficiently convert its assets into cash. Vigilant monitoring of the CCC can provide insights into the company's operational efficiency and financial health.