Verizon Communications Inc (VZ)

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 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 0.84 0.89 0.87 0.87
Quick ratio 0.53 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 0.62 0.71 0.70 0.69
Cash ratio 0.04 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 0.06 0.08 0.05 0.06

Verizon Communications Inc's liquidity ratios, as reflected by its current ratio, quick ratio, and cash ratio, indicate the company's ability to meet its short-term financial obligations.

The current ratio, which measures the firm's ability to cover its short-term liabilities with its current assets, has shown a declining trend from Q1 2022 to Q4 2023, hovering around 0.69 to 0.75. A current ratio below 1 may indicate potential liquidity issues, as the company may not have enough current assets to cover its current liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibits a decreasing trend from Q1 2022 to Q4 2023, ranging from 0.63 to 0.70. This suggests that Verizon Communications Inc may struggle to meet its short-term obligations without relying on selling inventory.

The cash ratio, which specifically assesses the company's ability to cover its short-term liabilities with cash and cash equivalents, has fluctuated between 0.15 to 0.24 over the same period. A lower cash ratio indicates a higher dependency on non-cash current assets to meet short-term obligations.

Overall, the declining trend in both the current and quick ratios suggests that Verizon Communications Inc's liquidity position may be weakening. The cash ratio, although volatile, indicates some level of cash cushion to cover immediate obligations. It is important for the company to closely monitor and manage its liquidity position to ensure it can meet its short-term financial commitments effectively.

See also:

Verizon Communications Inc Liquidity Ratios (Quarterly Data)

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 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 3.89 83.05 80.21 80.90

Verizon Communications Inc's cash conversion cycle fluctuated over the past eight quarters. In Q4 2023, the company's cash conversion cycle was the lowest at 15.38 days, indicating efficient management of cash, receivables, and inventory. However, in Q3 2023, the cycle increased significantly to 78.98 days, suggesting a delay in converting investments in inventory into cash receipts from sales. This trend continued in Q2 and Q1 2023, with the cash conversion cycle remaining high at 74.91 days and 76.16 days, respectively.

Comparing to previous years, in Q4 2022, Verizon had a lower cash conversion cycle of 26.10 days, showcasing better working capital management. However, this improved performance was not sustained as the cycle increased in subsequent quarters, peaking at 88.20 days in Q2 2022 and 87.56 days in Q1 2022.

Overall, fluctuations in Verizon's cash conversion cycle indicate variations in the company's ability to efficiently convert its investments in working capital into cash inflows. It is essential for Verizon to closely monitor and manage its working capital components to optimize the cash conversion cycle and enhance liquidity and operational efficiency.