Verizon Communications Inc (VZ)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.63 | 0.69 | 0.75 | 0.78 | 1.38 |
| Quick ratio | 0.49 | 0.52 | 0.53 | 0.57 | 1.13 |
| Cash ratio | 0.06 | 0.03 | 0.04 | 0.06 | 0.53 |
Verizon Communications Inc's liquidity ratios show a declining trend over the years. The current ratio, which measures the company's ability to meet short-term obligations, decreased from 1.38 in 2020 to 0.63 in 2024. Similarly, the quick ratio, a more stringent liquidity measure excluding inventory, decreased from 1.13 in 2020 to 0.49 in 2024.
The cash ratio, which indicates the proportion of current liabilities that could be covered by cash and cash equivalents, declined from 0.53 in 2020 to 0.06 in 2024. This suggests that Verizon may face challenges in meeting its short-term obligations with its available cash resources alone.
Overall, the decreasing trend in liquidity ratios raises concerns about Verizon's ability to manage its short-term financial obligations effectively. Investors and stakeholders may need to monitor Verizon's liquidity position closely to assess its financial health and ability to weather potential economic challenges.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 18.09 | 20.64 | 13.96 | 21.07 | 31.72 |
Verizon Communications Inc's cash conversion cycle has shown a positive trend from 31.72 days at the end of 2020 to 18.09 days by the end of 2024. This indicates that the company has been able to efficiently manage its working capital and convert its inventory and accounts receivable into cash more quickly over the period.
The decreasing trend in the cash conversion cycle suggests that Verizon has improved its inventory management and collection of receivables while also maintaining strong relationships with its suppliers. A lower cash conversion cycle means the company is taking less time to turn its investments in inventory and accounts receivable into cash receipts, which is a positive sign of operational efficiency.
Overall, the decreasing trend in Verizon Communications Inc's cash conversion cycle reflects effective working capital management and indicates that the company has been able to optimize its cash flow over the period analyzed.