T-Mobile US Inc (TMUS)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.91 | 0.77 | 0.89 | 1.10 | 0.74 |
| Quick ratio | 0.68 | 0.57 | 0.66 | 0.84 | 0.48 |
| Cash ratio | 0.25 | 0.18 | 0.28 | 0.48 | 0.12 |
Liquidity ratios measure a company's ability to meet its short-term obligations using its current assets. T-Mobile US Inc's liquidity ratios, including the current ratio, quick ratio, and cash ratio, show its ability to cover short-term liabilities.
The current ratio fluctuated over the past five years, ranging from 0.74 to 1.10. While a current ratio above 1 generally indicates good short-term liquidity, T-Mobile's current ratio has been consistently below this benchmark, suggesting potential challenges in meeting short-term obligations.
Similarly, the quick ratio, which excludes inventory from current assets, has also been below 1 over the same period, indicating a lower level of immediate liquidity. This may be due to the nature of T-Mobile's current assets composition, which may not be as easily convertible into cash.
The cash ratio, which represents the company's ability to meet short-term obligations with cash and cash equivalents, has also been below 1 in all periods. This indicates a reliance on other current assets to meet its short-term obligations, as cash alone may not be sufficient for T-Mobile to cover its liabilities.
Overall, T-Mobile US Inc's liquidity ratios suggest that while the company may have some challenges meeting its short-term obligations using current assets alone, it has managed to maintain a level of liquidity over the years. Investors and stakeholders may want to monitor these ratios closely to assess the company's ability to manage its short-term financial commitments.
See also:
T-Mobile US Inc Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -14.92 | -28.89 | -18.77 | -3.10 | -42.48 |
The cash conversion cycle of T-Mobile US Inc has shown fluctuations over the past five years. The company had a negative cash conversion cycle in 2023 and 2022, indicating that it took less time to convert its investments in inventory and other resources into cash inflows. This suggests efficient working capital management during those years.
In 2021 and 2020, the cash conversion cycle was positive, indicating that the company took more time to convert its investments into cash. The increase in the cash conversion cycle during these years may signify challenges in managing working capital efficiently.
Significantly, in 2019, T-Mobile US Inc had a significantly negative cash conversion cycle, which implies a highly efficient utilization of working capital, enabling the company to swiftly convert investments into cash inflows.
Overall, T-Mobile US Inc's cash conversion cycle has varied over the years, highlighting the importance of monitoring working capital management practices to ensure efficient operations and financial performance.