Verizon Communications Inc (VZ)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 0.63 0.66 0.63 0.71 0.69 0.68 0.73 0.75 0.75 0.75 0.76 0.76 0.78 0.97 0.89 1.02 1.38 1.07 0.96 0.99
Quick ratio 0.49 0.51 0.47 0.53 0.52 0.50 0.55 0.53 0.54 0.49 0.79 0.54 0.57 0.80 0.66 0.86 1.18 0.89 0.79 0.75
Cash ratio 0.06 0.08 0.04 0.04 0.03 0.08 0.09 0.05 0.05 0.04 0.04 0.04 0.06 0.27 0.13 0.28 0.57 0.26 0.20 0.17

Verizon Communications Inc's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, provide insight into the company's ability to meet its short-term obligations and manage its financial resources effectively.

The current ratio reflects the company's short-term liquidity position by comparing current assets to current liabilities. At the end of December 31, 2024, Verizon's current ratio was 0.63, indicating that its current assets were only able to cover 63% of its current liabilities. The decreasing trend in the current ratio over the past few quarters may suggest potential challenges in meeting short-term financial obligations.

The quick ratio provides a more stringent measure of liquidity by excluding inventory from current assets. As of December 31, 2024, Verizon's quick ratio was 0.49, suggesting that the company may face difficulty in meeting its immediate obligations without relying on inventory. The decreasing trend in the quick ratio also raises concerns about Verizon's ability to cover short-term liabilities without selling inventory.

Lastly, the cash ratio focuses solely on the company's ability to pay off short-term liabilities with cash and cash equivalents. With a cash ratio of 0.06 as of December 31, 2024, Verizon may have limited cash reserves to cover its immediate obligations. The fluctuations in the cash ratio over the quarters indicate variability in Verizon's cash position.

In summary, Verizon Communications Inc's liquidity ratios show a declining trend in its ability to cover short-term obligations with current assets and cash reserves. This suggests the importance for Verizon to carefully manage its working capital and maintain sufficient liquidity to navigate potential financial challenges in the future.

See also:

Verizon Communications Inc Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 18.09 92.50 87.13 88.33 3.11 81.53 77.53 80.32 13.96 90.43 132.26 96.66 21.07 78.30 69.25 73.37 31.72 79.16 77.01 82.80

The cash conversion cycle of Verizon Communications Inc has shown fluctuations over the periods analyzed. The cycle started at 82.80 days in March 2020 and decreased to 31.72 days by December 2020, indicating an improvement in the efficiency of cash flow management. However, in June 2021, the cycle increased to 69.25 days before rising sharply to 132.26 days by June 2022, signaling potential challenges in converting company assets into cash.

Subsequently, the cycle decreased to 13.96 days by December 2022, suggesting a significant improvement in cash conversion efficiency. However, it increased again to 88.33 days by March 2024, demonstrating a potential delay in the collection of receivables or managing inventory levels.

Overall, fluctuations in the cash conversion cycle of Verizon Communications Inc reflect changes in working capital management efficiency and operational effectiveness. The company may need to closely monitor its cash conversion cycle to ensure optimal cash flow performance in the future.