Philip Morris International Inc (PM)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.75 | 0.72 | 0.92 | 1.10 | 1.09 |
| Quick ratio | 0.28 | 0.32 | 0.47 | 0.83 | 0.59 |
| Cash ratio | 0.12 | 0.12 | 0.23 | 0.62 | 0.36 |
The liquidity ratios of Philip Morris International 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 1.09 in 2019 to 0.75 in 2023. This indicates a decreasing ability to meet short-term liabilities with current assets.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Philip Morris' quick ratio has also decreased from 0.60 in 2019 to 0.34 in 2023, suggesting a declining ability to cover immediate liabilities without relying on inventory.
Furthermore, the cash ratio, which focuses solely on the most liquid assets like cash and cash equivalents, has shown a downward trend from 0.40 in 2019 to 0.17 in 2023. This indicates a reduced capacity of the company to cover its current liabilities with cash and cash equivalents alone.
Overall, the decreasing trend in all three liquidity ratios suggests potential liquidity challenges for Philip Morris International Inc in meeting its short-term obligations. Investors and stakeholders may want to monitor these ratios closely to assess the company's ability to manage its liquidity effectively.
See also:
Philip Morris International 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 | 206.56 | 188.28 | 175.67 | 231.48 | 213.06 |
The cash conversion cycle of Philip Morris International Inc has shown a fluctuating trend over the past five years. In particular, the company's cash conversion cycle decreased from 307.64 days in 2020 to 233.29 days in 2023, indicating an improvement in the efficiency of its working capital management.
A lower cash conversion cycle suggests that the company is able to convert its investments in raw materials and production into cash more quickly, which can be a positive indicator of operational efficiency and liquidity.
It is important for investors to monitor the cash conversion cycle of Philip Morris International Inc to assess how efficiently the company is managing its working capital and converting its resources into revenue.