PPG Industries Inc (PPG)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.47 | 1.52 | 1.42 | 1.41 | 1.41 |
| Quick ratio | 0.96 | 0.94 | 0.89 | 0.96 | 0.92 |
| Cash ratio | 0.31 | 0.24 | 0.22 | 0.40 | 0.29 |
When analyzing PPG Industries, Inc.'s liquidity ratios over the past five years, we can see the following trends:
1. Current Ratio:
- PPG's current ratio has been relatively stable, ranging between 1.41 and 1.52.
- The current ratio measures the company's ability to cover its short-term liabilities with its current assets. A current ratio above 1 indicates that PPG has sufficient current assets to cover its current liabilities.
2. Quick Ratio:
- PPG's quick ratio has also shown consistency, hovering around 1.00 in recent years.
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. A quick ratio above 1 suggests that PPG can meet its short-term obligations without relying on selling inventory.
3. Cash Ratio:
- PPG's cash ratio has shown fluctuations over the years, ranging from 0.30 to 0.48.
- The cash ratio measures the company's ability to cover its current liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations using readily available cash resources.
Overall, PPG Industries, Inc. has maintained healthy liquidity levels over the past five years, with current and quick ratios consistently above 1, indicating a strong ability to cover short-term obligations. The fluctuation in the cash ratio suggests variations in the company's cash position, but overall, PPG appears to have maintained a satisfactory level of liquidity to support its ongoing operations.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 54.86 | 62.59 | 54.15 | 56.25 | 55.60 |
The cash conversion cycle of PPG Industries, Inc. has varied over the past five years. In 2023, the cash conversion cycle decreased to 49.12 days from 59.55 days in the previous year. This improvement indicates that the company was able to convert its investments in inventory and accounts receivable into cash more efficiently.
Comparing to 2021 and 2020, where the cycle was 48.49 days and 47.33 days respectively, the 2023 cycle appears slightly higher. However, it is still in line with historical performance. In 2019, the cycle was slightly longer at 50.05 days.
Overall, the trend in the cash conversion cycle for PPG Industries, Inc. shows some fluctuations but generally remains within a reasonable range over the past five years. This suggests that the company has been effectively managing its working capital and the efficiency of its cash conversion process.