Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
---|---|---|---|---|---|---|
Current ratio | 1.56 | 1.73 | 2.20 | 1.52 | 1.34 | |
Quick ratio | 1.38 | 1.55 | 2.00 | 1.37 | 1.11 | |
Cash ratio | 0.84 | 1.04 | 1.55 | 0.91 | 0.58 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The analysis of the liquidity ratios over the five-year period reveals several notable trends in the company's short-term financial position.
- Current Ratio
- The current ratio exhibits an overall upward trend from 1.34 in 2018 to a peak of 2.20 in 2020, indicating an improvement in the company's ability to cover its short-term liabilities with current assets. However, the ratio declined to 1.73 in 2021 and further to 1.56 in 2022, suggesting a moderate reduction in liquidity compared to the peak year but still maintaining a level above the starting point in 2018.
- Quick Ratio
- The quick ratio follows a similar pattern to the current ratio, increasing from 1.11 in 2018 to 2.00 in 2020, which suggests enhanced liquidity excluding inventory. Thereafter, it decreased to 1.55 in 2021 and 1.38 in 2022, indicating a slight decline but still significantly stronger than in 2018. The quick ratio remains comfortably above 1 throughout the period, reflecting sufficient liquid assets to meet immediate obligations.
- Cash Ratio
- The cash ratio, representing the most conservative measure of liquidity, shows a consistent rising trend from 0.58 in 2018 to 1.55 in 2020. This sharp increase indicates a buildup of cash and cash equivalents relative to current liabilities. Post-2020, the ratio declines to 1.04 in 2021 and then to 0.84 in 2022. Despite this decrease, the cash ratio remains higher than the starting level in 2018, pointing to a generally strong cash position, albeit with some reduction in liquidity in the last two years.
In summary, there was a significant strengthening of liquidity ratios until 2020 across all metrics, likely reflecting increased current assets and cash reserves. From 2021 onward, liquidity ratios declined moderately, although they remain above 2018 levels, indicating that the company has maintained a relatively solid liquidity position despite some reduction from the peak years.
Current Ratio
Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Current assets | 3,849) | 3,873) | 4,441) | 3,278) | 2,565) | |
Current liabilities | 2,471) | 2,233) | 2,019) | 2,151) | 1,915) | |
Liquidity Ratio | ||||||
Current ratio1 | 1.56 | 1.73 | 2.20 | 1.52 | 1.34 | |
Benchmarks | ||||||
Current Ratio, Competitors2 | ||||||
FedEx Corp. | 1.43 | 1.51 | 1.58 | 1.45 | — | |
Uber Technologies Inc. | 1.04 | 0.98 | 1.44 | — | — | |
Union Pacific Corp. | 0.72 | 0.62 | 1.01 | — | — | |
United Airlines Holdings Inc. | 1.00 | 1.19 | 1.16 | — | — | |
United Parcel Service Inc. | 1.22 | 1.42 | 1.19 | — | — | |
Current Ratio, Sector | ||||||
Transportation | 1.14 | 1.24 | 1.28 | — | — | |
Current Ratio, Industry | ||||||
Industrials | 1.20 | 1.29 | 1.41 | — | — |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= 3,849 ÷ 2,471 = 1.56
2 Click competitor name to see calculations.
- Current Assets
- Current assets increased steadily from US$ 2,565 million in 2018 to US$ 4,441 million in 2020, reflecting a significant growth of approximately 73% over this two-year period. However, after reaching this peak in 2020, current assets declined to US$ 3,873 million in 2021 and further slightly decreased to US$ 3,849 million in 2022. This suggests a reversal in the prior accumulation of liquid or short-term assets after 2020.
- Current Liabilities
- Current liabilities demonstrated a consistent upward trend throughout the period, rising from US$ 1,915 million in 2018 to US$ 2,471 million in 2022. This represents an increase of about 29% over five years, with only a small dip noted in 2020. The growth in current liabilities indicates rising short-term obligations over the timeframe.
- Current Ratio
- The current ratio, representing short-term liquidity, improved notably from 1.34 in 2018 to a peak of 2.20 in 2020, signaling enhanced ability to cover current liabilities with current assets during that year. Subsequently, it declined to 1.73 in 2021 and then further to 1.56 in 2022, though remaining above the 2018 level. This pattern indicates that despite recent decreases, liquidity remained stronger than at the beginning of the period, but the downward trend in the last two years may warrant monitoring to ensure continued financial flexibility.
Quick Ratio
Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | 1,958) | 2,239) | 3,129) | 958) | 858) | |
Short-term investments | 129) | 77) | 2) | 996) | 253) | |
Accounts receivable, net | 1,313) | 1,148) | 912) | 986) | 1,010) | |
Total quick assets | 3,400) | 3,464) | 4,043) | 2,940) | 2,121) | |
Current liabilities | 2,471) | 2,233) | 2,019) | 2,151) | 1,915) | |
Liquidity Ratio | ||||||
Quick ratio1 | 1.38 | 1.55 | 2.00 | 1.37 | 1.11 | |
Benchmarks | ||||||
Quick Ratio, Competitors2 | ||||||
FedEx Corp. | 1.31 | 1.40 | 1.45 | 1.27 | — | |
Uber Technologies Inc. | 0.88 | 0.82 | 1.19 | — | — | |
Union Pacific Corp. | 0.52 | 0.47 | 0.79 | — | — | |
United Airlines Holdings Inc. | 0.91 | 1.10 | 1.02 | — | — | |
United Parcel Service Inc. | 1.11 | 1.32 | 1.00 | — | — | |
Quick Ratio, Sector | ||||||
Transportation | 1.02 | 1.13 | 1.10 | — | — | |
Quick Ratio, Industry | ||||||
Industrials | 0.72 | 0.80 | 0.87 | — | — |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 3,400 ÷ 2,471 = 1.38
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibited a generally upward trend from 2018 to 2020, increasing from 2,121 million US dollars to 4,043 million US dollars. This was followed by a decline in 2021 to 3,464 million US dollars, which slightly continued in 2022 reaching 3,400 million US dollars.
- Current Liabilities
- Current liabilities showed a gradual increase over the observed period. Starting at 1,915 million US dollars in 2018, liabilities increased to 2,151 million in 2019, then slightly decreased in 2020 to 2,019 million before increasing again in 2021 and 2022 to 2,233 million and 2,471 million US dollars, respectively.
- Quick Ratio
- The quick ratio, an indicator of short-term liquidity, improved from 1.11 in 2018 to a peak of 2.00 in 2020. After this peak, it declined to 1.55 in 2021 and further to 1.38 in 2022, though it remained above the initial 2018 level.
- Summary
- Overall, the company’s quick assets and current liabilities demonstrated some volatility, with quick assets peaking in 2020 and then experiencing a decline, while current liabilities showed a more consistent upward trajectory over the five years. The quick ratio peaked significantly in 2020, suggesting enhanced liquidity at that time, but it subsequently decreased, indicating a reduction in liquidity though still at a level above the starting point in 2018. The data suggests that the company managed to strengthen its liquidity position up to 2020 but faced some reversal in the subsequent years.
Cash Ratio
Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | 1,958) | 2,239) | 3,129) | 958) | 858) | |
Short-term investments | 129) | 77) | 2) | 996) | 253) | |
Total cash assets | 2,087) | 2,316) | 3,131) | 1,954) | 1,111) | |
Current liabilities | 2,471) | 2,233) | 2,019) | 2,151) | 1,915) | |
Liquidity Ratio | ||||||
Cash ratio1 | 0.84 | 1.04 | 1.55 | 0.91 | 0.58 | |
Benchmarks | ||||||
Cash Ratio, Competitors2 | ||||||
FedEx Corp. | 0.48 | 0.52 | 0.47 | 0.26 | — | |
Uber Technologies Inc. | 0.56 | 0.55 | 1.03 | — | — | |
Union Pacific Corp. | 0.18 | 0.17 | 0.43 | — | — | |
United Airlines Holdings Inc. | 0.82 | 1.01 | 0.92 | — | — | |
United Parcel Service Inc. | 0.42 | 0.60 | 0.37 | — | — | |
Cash Ratio, Sector | ||||||
Transportation | 0.55 | 0.65 | 0.62 | — | — | |
Cash Ratio, Industry | ||||||
Industrials | 0.32 | 0.39 | 0.47 | — | — |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 2,087 ÷ 2,471 = 0.84
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited a notable upward trend from 2018 to 2020, increasing from 1,111 million US dollars to a peak of 3,131 million US dollars. However, this was followed by a decline over the subsequent two years, with cash assets falling to 2,316 million in 2021 and further to 2,087 million in 2022. While the asset base remains higher than the 2018 level, the reduction after 2020 indicates a possible change in liquidity management or utilization of cash resources.
- Current Liabilities
- Current liabilities showed a consistent increase throughout the entire period. Starting at 1,915 million US dollars in 2018, liabilities rose steadily each year, reaching 2,471 million by the end of 2022. This upward trajectory signals growing short-term obligations, which could impact the company's liquidity if not managed alongside corresponding asset growth.
- Cash Ratio
- The cash ratio, which measures the ability to cover current liabilities with cash assets, reflected significant fluctuations alongside changes in cash assets and liabilities. The ratio improved from 0.58 in 2018 to a peak of 1.55 in 2020, indicating strong liquidity that year. Post-2020, it declined to 1.04 in 2021 and further to 0.84 in 2022, suggesting a decreasing liquidity buffer relative to current liabilities. Despite this reduction, the ratio remained above 0.5 throughout, indicating the company maintained some capacity to meet short-term obligations with cash.