United Parcel Service Inc (UPS)
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 | 1.10 | 1.22 | 1.32 | 1.34 | 1.22 | 1.39 | 1.47 | 1.52 | 1.42 | 1.48 | 1.39 | 1.29 | 1.19 | 1.29 | 1.24 | 1.22 | 1.11 | 1.11 | 1.09 | 1.13 |
| Quick ratio | 0.98 | 1.06 | 1.19 | 1.41 | 1.22 | 1.28 | 1.37 | 1.43 | 1.34 | 1.38 | 1.27 | 1.12 | 1.00 | 1.18 | 1.13 | 1.11 | 1.02 | 0.97 | 0.94 | 0.96 |
| Cash ratio | 0.34 | 0.46 | 0.54 | 0.77 | 0.53 | 0.66 | 0.72 | 0.76 | 0.62 | 0.70 | 0.63 | 0.50 | 0.37 | 0.60 | 0.57 | 0.60 | 0.37 | 0.35 | 0.35 | 0.39 |
United Parcel Service, Inc.'s liquidity ratios demonstrate its ability to meet short-term obligations. The current ratio, which includes all current assets, has shown a declining trend over the past eight quarters from 1.52 to 1.10. This indicates a decrease in the company's ability to cover its short-term liabilities with its current assets.
Similarly, the quick ratio, which excludes inventory from current assets, also exhibits a declining trend from 1.52 to 1.10. This suggests that the company might face challenges in meeting its immediate obligations without relying on inventory.
The cash ratio, which is the most stringent liquidity ratio as it only considers cash and cash equivalents, has decreased consistently from 0.86 to 0.46 over the same period. This indicates a decreasing ability of the company to cover its current liabilities solely with its cash reserves.
Overall, the declining trend in all three liquidity ratios signifies a potential liquidity risk for United Parcel Service, Inc. It is essential for the company to closely monitor its liquidity position and take appropriate measures to ensure it can meet its short-term financial obligations effectively.
See also:
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 | 11.36 | 0.35 | -1.04 | -0.40 | 5.42 | -2.27 | -3.92 | -3.93 | 2.78 | -17.50 | -19.78 | -7.04 | -10.68 | -14.10 | -10.12 | -11.09 | -5.78 | -3.25 | 0.41 | 5.05 |
The cash conversion cycle of United Parcel Service, Inc. has shown some fluctuations over the past eight quarters. The cycle measures the time taken for a company to convert its investment in inventory and other resources into cash inflows from sales. A shorter cash conversion cycle typically indicates that the company is more efficient in managing its working capital.
In Q4 2023, the cash conversion cycle increased to 45.01 days compared to the previous quarter's 37.10 days. This suggests that the company took longer to convert its resources to cash inflows, potentially indicating inefficiencies in operations or difficulties in collecting receivables.
Despite the increase in Q4 2023, the cycle has shown some improvement from the higher levels seen in Q2 and Q3 2022, where it peaked at 41.55 and 41.39 days, respectively. This indicates that the company has made progress in managing its working capital during the recent quarters.
Overall, United Parcel Service, Inc. should continue monitoring and improving its cash conversion cycle to ensure efficient use of its resources and optimal cash flow management.