United Parcel Service Inc (UPS)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.17 | 1.10 | 1.22 | 1.42 | 1.19 |
| Quick ratio | 0.38 | 0.34 | 0.42 | 0.60 | 0.37 |
| Cash ratio | 0.38 | 0.34 | 0.42 | 0.60 | 0.37 |
United Parcel Service Inc's current ratio has shown fluctuations over the years, ranging from a low of 1.10 on December 31, 2023, to a high of 1.42 on December 31, 2021. This ratio indicates the company's ability to cover its short-term obligations with its current assets, with a ratio above 1 suggesting a healthy liquidity position.
The quick ratio, which excludes inventory from current assets, has also varied, with a low of 0.34 on December 31, 2023, and a high of 0.60 on December 31, 2021. This ratio provides a more conservative measure of liquidity, as it reflects the company's ability to meet short-term obligations without relying on selling inventory.
The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, has remained relatively stable over the years, ranging from 0.34 to 0.60. This ratio highlights the company's ability to cover its current liabilities with its readily available cash resources.
Overall, United Parcel Service Inc's liquidity ratios demonstrate a generally healthy liquidity position, with the current and quick ratios staying above 1 for most of the periods analyzed. The company appears to have the ability to meet its short-term obligations comfortably, though monitoring fluctuations in these ratios over time is crucial for assessing the company's liquidity risk.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 4.04 | 4.63 | 3.72 | 3.10 | 2.95 |
The cash conversion cycle of United Parcel Service Inc has shown an increasing trend from 2.95 days as of December 31, 2020, to 4.04 days as of December 31, 2024. This indicates that the company is taking longer to convert its investments in inventory into cash receipts from sales. This trend suggests that UPS may be facing challenges in managing its working capital efficiently, potentially due to issues in inventory management, accounts receivable collection, or accounts payable payment. It is crucial for the company to address these inefficiencies to improve its cash conversion cycle and overall liquidity position.