Verizon Communications Inc (VZ)

Liquidity ratios

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Current ratio 0.69 0.75 0.78 1.38 0.84
Quick ratio 0.53 0.54 0.57 1.18 0.62
Cash ratio 0.04 0.05 0.06 0.57 0.06

Verizon Communications Inc's liquidity ratios have fluctuated over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has shown a decreasing trend from 1.38 in 2020 to 0.69 in 2023. This indicates that Verizon may be facing challenges in meeting its short-term obligations with its current assets.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also decreased over the years from 1.30 in 2020 to 0.63 in 2023. This suggests that Verizon's ability to meet its short-term liabilities without relying on inventory has weakened.

The cash ratio, which focuses solely on a company's ability to cover its short-term liabilities with its cash and cash equivalents, has exhibited a declining trend from 0.70 in 2020 to 0.16 in 2023. This indicates that Verizon may have limited cash resources available to meet its immediate obligations.

Overall, Verizon Communications Inc's liquidity ratios show a deterioration in its short-term financial health, as reflected by decreasing current, quick, and cash ratios over the past five years. It is essential for the company to closely monitor its liquidity position and implement strategies to improve its ability to meet its short-term obligations.


See also:

Verizon Communications 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 20.64 13.96 21.07 31.72 21.70

Verizon Communications Inc's cash conversion cycle has shown improvement over the last five years. The company's cash conversion cycle decreased from 28.35 days in 2019 to 15.38 days in 2023, indicating that the company has become more efficient in managing its working capital. A lower cash conversion cycle suggests that Verizon is taking less time to convert its investments in inventory and accounts receivable into cash.

The decreasing trend in the cash conversion cycle could indicate that Verizon has improved its inventory management and accounts receivable collection processes. This could lead to better liquidity and cash flow for the company, enabling it to meet its short-term financial obligations more effectively.

Overall, the downward trend in Verizon's cash conversion cycle reflects positively on the company's operational efficiency and working capital management in recent years.