Telephone and Data Systems Inc (TDS)

The liquidity ratios of Telephone and Data Systems Inc have shown some fluctuations over the years.

1. Current Ratio: This ratio indicates the company's ability to cover its short-term liabilities with its short-term assets. The current ratio has decreased from 2.62 in 2020 to 1.34 in 2022, indicating a declining ability to meet short-term obligations. Although there was a slight improvement in 2023 and 2024, it dropped significantly to 0.03 in 2024, suggestive of a potential liquidity concern.

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. Telephone and Data Systems Inc's quick ratio has decreased from 1.24 in 2020 to 0.20 in 2023, which may indicate a decreasing ability to meet immediate obligations. However, there was a slight improvement to 0.33 in 2024.

3. Cash Ratio: The cash ratio measures a company's ability to cover its short-term liabilities with cash and cash equivalents alone. This ratio has mirrored the trends seen in the quick ratio, declining from 1.24 in 2020 to 0.20 in 2023, before improving to 0.33 in 2024.

Overall, the liquidity ratios of Telephone and Data Systems Inc have shown some weakness, especially in the most recent year, as indicated by decreasing current, quick, and cash ratios. The company may need to assess its liquidity management strategies to ensure it has sufficient resources to meet its short-term obligations.

---

Additional liquidity measure

The cash conversion cycle for Telephone and Data Systems Inc has shown some fluctuations over the years. In December 2020, the company's cash conversion cycle was 23.88 days, indicating a relatively efficient management of cash flow from operations, through inventory, and to accounts receivable. However, by December 2021, the cash conversion cycle had increased to 26.28 days, suggesting a slight slowdown in the conversion of resources to cash.

The trend continued with a significant increase to 38.14 days by December 2022, indicating a longer time taken for the company to convert its investments in inventory and accounts receivable into cash inflows. This prolonged cycle may be a cause for concern as it can tie up valuable resources and potentially impact the company's liquidity.

By December 2023, there was a slight improvement as the cash conversion cycle decreased to 32.53 days, suggesting some effort to manage working capital more effectively. However, as of December 2024, the cycle remained relatively high at 31.29 days, indicating that the company may still be facing challenges in optimizing its cash flow processes.

Overall, it is important for Telephone and Data Systems Inc to closely monitor and address the factors contributing to the fluctuations in its cash conversion cycle to ensure efficient management of working capital and maintain strong liquidity positions.