T-Mobile US Inc (TMUS)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.91 | 0.91 | 0.77 | 0.89 | 1.10 |
| Quick ratio | 0.70 | 0.68 | 0.57 | 0.66 | 0.84 |
| Cash ratio | 0.27 | 0.25 | 0.18 | 0.28 | 0.48 |
T-Mobile US Inc's liquidity ratios demonstrate a declining trend over the years, indicating potential challenges in meeting its short-term financial obligations.
The current ratio, which compares current assets to current liabilities, shows a decrease from 1.10 in 2020 to 0.91 in 2024, with a low point of 0.77 in 2022. This suggests that T-Mobile may have struggled to cover its short-term liabilities with its current assets in certain years.
Similarly, the quick ratio, a more stringent measure that excludes inventory from current assets, has also decreased from 0.84 in 2020 to 0.70 in 2024. This indicates that T-Mobile's ability to meet immediate obligations without relying on inventory has weakened over time.
The cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, has seen a decline from 0.48 in 2020 to 0.27 in 2024. This may imply that T-Mobile's cash reserves relative to its short-term liabilities have diminished, potentially raising concerns about its liquidity position.
Overall, the decreasing liquidity ratios for T-Mobile US Inc suggest a need for close monitoring of its ability to manage short-term financial obligations and maintain adequate cash reserves in the future.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -0.35 | -14.92 | -28.89 | -18.77 | -3.10 |
The cash conversion cycle of T-Mobile US Inc has shown a fluctuating trend over the period with negative values indicating efficient management of its working capital. The cycle decreased from -3.10 days in December 31, 2020 to -18.77 days in December 31, 2021, reflecting a significant improvement in the efficiency of converting its resources into cash. However, there was a slight increase in the cycle to -28.89 days by December 31, 2022, suggesting a temporary slowdown in cash conversion efficiency.
Subsequently, the cash conversion cycle decreased to -14.92 days by December 31, 2023, showing a partial recovery from the previous year's increase. Finally, by December 31, 2024, the cycle further decreased to -0.35 days, indicating a return to higher efficiency levels in converting resources to cash.
Overall, T-Mobile US Inc has demonstrated a generally efficient cash conversion cycle over the period, with occasional fluctuations that may require monitoring to ensure sustainable working capital management.