TE Connectivity Ltd (TEL)

Liquidity ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 1.86 1.77 1.80 1.69 1.66 1.57 1.50 1.47 1.69 1.56 1.59 1.47 1.59 1.57 1.43 1.44 1.64 1.57 1.47 1.41
Quick ratio 1.00 1.04 0.97 0.90 0.84 0.85 0.78 0.76 0.90 0.89 0.94 0.93 0.92 0.90 0.70 0.82 0.90 0.92 0.81 0.78
Cash ratio 0.29 0.37 0.27 0.21 0.18 0.23 0.16 0.15 0.23 0.26 0.30 0.35 0.27 0.26 0.13 0.20 0.22 0.26 0.15 0.15

TE Connectivity Ltd's liquidity ratios have shown some fluctuations over the past few quarters. The current ratio has ranged between 1.66 and 1.86, indicating that the company has generally had more than enough current assets to cover its current liabilities. However, there was a slight decrease in the current ratio from December 2023 to March 2023, suggesting a potential decrease in liquidity.

The quick ratio has varied between 0.76 and 1.04 during the same period. This ratio indicates the company's ability to meet its short-term obligations without relying on the sale of inventory. The quick ratio decreased from September 2023 to March 2020, which could imply that the company may have had fewer liquid assets to cover its current liabilities during that period.

The cash ratio, which provides the most conservative measure of liquidity, has fluctuated between 0.13 and 0.37. A higher cash ratio indicates a higher proportion of cash and cash equivalents relative to current liabilities. The cash ratio increased significantly from March 2020 to September 2023, implying an improvement in the company's ability to cover its short-term liabilities with cash on hand.

Overall, while TE Connectivity Ltd's current ratio suggests a good overall liquidity position, the fluctuations in the quick and cash ratios indicate some variability in the company's ability to meet its short-term obligations with liquid assets over the analyzed period. It may be beneficial for the company to monitor these ratios closely to ensure sufficient liquidity in the future.

Additional liquidity measure

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 95.70 95.44 99.56 98.80 98.15 95.02 105.52 102.87 95.17 90.21 90.20 93.12 91.00 93.52 95.77 88.33 83.75 79.15 84.15 80.61

TE Connectivity Ltd's cash conversion cycle fluctuated over the past five years, ranging from around 83 to 105 days. The cash conversion cycle measures the time it takes for a company to convert its resources (inventory) into cash flows from sales. A shorter cash conversion cycle typically indicates more efficient operations and better liquidity management.

In the most recent quarter, the cash conversion cycle stood at 95.70 days, showing a slight increase compared to the previous quarter. This increase may suggest that the company took longer to convert inventory into sales and then collect cash from customers.

Overall, TE Connectivity Ltd should aim to shorten its cash conversion cycle to improve efficiency and liquidity. This can be achieved by optimizing inventory management, streamlining accounts receivable collection, and extending accounts payable periods strategically. Monitoring and managing the cash conversion cycle effectively can contribute to the company's overall financial health and operational efficiency.