Philip Morris International Inc (PM)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.88 | 0.75 | 0.72 | 0.92 | 1.10 |
| Quick ratio | 0.39 | 0.28 | 0.32 | 0.47 | 0.83 |
| Cash ratio | 0.18 | 0.12 | 0.12 | 0.23 | 0.62 |
Philip Morris International Inc's liquidity ratios show a declining trend over the years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, decreased from 1.10 in 2020 to 0.88 in 2024. This indicates a potential weakening of the company's liquidity position.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also declined significantly from 0.83 in 2020 to 0.39 in 2024. This suggests that Philip Morris International Inc may face challenges in meeting its short-term obligations without relying on selling inventory.
The cash ratio, which indicates the proportion of immediate cash available to cover current liabilities, also fell from 0.62 in 2020 to 0.18 in 2024. This downward trend raises concerns about the company's ability to meet its obligations using cash reserves alone.
Overall, the decreasing values of these liquidity ratios suggest a potential liquidity risk for Philip Morris International Inc, highlighting the importance of closely monitoring its ability to meet short-term financial commitments.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 174.58 | 206.56 | 188.28 | 175.67 | 231.48 |
The cash conversion cycle of Philip Morris International Inc has shown fluctuations over the years based on the provided data.
As of December 31, 2020, the company had a cash conversion cycle of 231.48 days, indicating that it took approximately 231 days for the company to convert its investments in inventory and other resources into cash inflows from sales.
By December 31, 2021, the cash conversion cycle had improved to 175.67 days, signifying a more efficient management of working capital and quicker turnaround in converting investments into cash.
In 2022, the cash conversion cycle increased slightly to 188.28 days, suggesting a need for the company to focus on optimizing its processes to enhance cash flow efficiency.
Subsequently, on December 31, 2023, the cash conversion cycle further extended to 206.56 days, indicating potential challenges in managing working capital effectively, which could lead to cash flow constraints.
Finally, as of December 31, 2024, the cash conversion cycle decreased to 174.58 days, showing a positive trend towards improving efficiency in managing the conversion of investments into cash.
Overall, the fluctuations in the cash conversion cycle of Philip Morris International Inc highlight the importance of effectively managing working capital to enhance cash flow and overall financial performance.