United Airlines Holdings Inc (UAL)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 6,058,000 | 7,166,000 | 18,283,000 | 11,269,000 | 2,762,000 |
| Short-term investments | US$ in thousands | 8,330,000 | 9,248,000 | 123,000 | 414,000 | 2,182,000 |
| Receivables | US$ in thousands | 1,898,000 | 1,801,000 | 1,663,000 | 1,295,000 | 1,364,000 |
| Total current liabilities | US$ in thousands | 22,203,000 | 19,992,000 | 18,304,000 | 12,725,000 | 14,938,000 |
| Quick ratio | 0.73 | 0.91 | 1.10 | 1.02 | 0.42 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($6,058,000K
+ $8,330,000K
+ $1,898,000K)
÷ $22,203,000K
= 0.73
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of 1 indicates that a company's current assets, excluding inventory, are equal to its current liabilities.
Analyzing the quick ratio of United Airlines Holdings Inc over the past five years, we observe a decreasing trend from 0.48 in 2019 to 0.76 in 2023. This indicates a decline in the company's ability to cover its short-term liabilities with its liquid assets.
In 2021, the quick ratio was at its peak at 1.14, showing that United Airlines had a strong ability to meet its short-term obligations without relying on inventory. However, the ratio decreased to 1.07 in 2020 and further dropped to 0.95 in 2022.
The current quick ratio of 0.76 in 2023 suggests that United Airlines may face challenges in meeting its short-term obligations with its existing liquid assets alone. It is recommended for the company to closely monitor and manage its liquidity position to ensure financial stability and meet its financial obligations in a timely manner.
Peer comparison
Dec 31, 2023