Waste Management Inc (WM)
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 | 0.90 | 0.84 | 0.82 | 0.87 | 0.81 | 0.85 | 1.07 | 0.80 | 0.75 | 0.78 | 0.88 | 1.01 | 1.00 | 1.20 | 0.88 | 1.84 | 1.97 | 1.86 | 1.70 | 0.69 |
| Quick ratio | 0.79 | 0.73 | 0.70 | 0.74 | 0.71 | 0.73 | 0.96 | 0.69 | 0.65 | 0.78 | 0.87 | 1.01 | 0.98 | 1.19 | 0.83 | 1.89 | 0.74 | 1.65 | 1.50 | 0.52 |
| Cash ratio | 0.11 | 0.04 | 0.03 | 0.07 | 0.08 | 0.04 | 0.24 | 0.04 | 0.03 | 0.13 | 0.15 | 0.27 | 0.24 | 0.40 | 0.46 | 1.02 | 0.12 | 0.98 | 0.79 | 0.02 |
The liquidity ratios of Waste Management, Inc. provide insight into the company's ability to meet its short-term obligations and manage its current financial obligations.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally shown a declining trend over the past eight quarters, ranging from 0.80 to 0.90. A current ratio below 1 indicates that the company may have difficulty meeting its short-term obligations using its current assets alone. Waste Management, Inc. has experienced some fluctuation in its current ratio, with improvements in Q2 2022 and Q1 2023 compared to relatively weaker performance in other quarters.
The quick ratio, or acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets. Similar to the current ratio, the quick ratio has shown a general downward trend over the quarters, ranging from 0.76 to 0.86. The quick ratio provides a more conservative view of the company's liquidity position, as it indicates how well Waste Management, Inc. can pay off its current liabilities without relying on the sale of inventory.
The cash ratio, which is the most conservative measure of liquidity, focuses solely on a company's ability to pay off its current liabilities using only cash and cash equivalents. Waste Management, Inc.'s cash ratio has also fluctuated over the quarters, with values ranging from 0.11 to 0.31. A higher cash ratio is generally preferred as it suggests that the company has a greater ability to cover its short-term liabilities with cash on hand.
In summary, Waste Management, Inc.'s liquidity ratios reflect a mixed performance in terms of its ability to meet short-term financial obligations. While there have been fluctuations in the ratios over the quarters, the company may need to closely monitor its liquidity position to ensure it can effectively manage its current liabilities and maintain financial stability.
See also:
Waste Management 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 | 15.40 | 15.10 | 16.71 | 15.34 | 11.65 | 17.31 | 20.38 | 17.48 | 19.29 | 20.46 | 23.15 | 24.48 | 33.16 | 19.95 | 16.19 | 23.67 | 4.76 | 13.25 | 12.97 | 8.62 |
The cash conversion cycle of Waste Management, Inc. experienced fluctuations throughout the quarters analyzed. In Q4 2023, the company's cash conversion cycle was 6.81 days, which improved compared to the previous quarter. This indicates that Waste Management was able to manage its cash efficiently during the period.
However, looking back at Q2 and Q3 2023, the cash conversion cycle increased to 9.44 days and 7.41 days, respectively, which suggests a slowdown in the company's ability to convert its resources into cash.
Comparing the data to the same periods in 2022, there seems to be some improvement as Q4 2023 performed better than Q4 2022 when the cash conversion cycle was 3.43 days, indicating a more efficient management of cash flows at the end of 2023.
Overall, Waste Management's cash conversion cycle has shown variability over the quarters, and the company may need to focus on optimizing its working capital management to ensure a more consistent and efficient cash conversion process.