Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
United Airlines Holdings Inc., liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | 0.81 | 0.83 | 1.00 | 1.19 | 1.16 | |
| Quick ratio | 0.71 | 0.73 | 0.91 | 1.10 | 1.02 | |
| Cash ratio | 0.62 | 0.65 | 0.82 | 1.01 | 0.92 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Current Ratio
- The current ratio shows a declining trend over the reported period. It started at 1.16 in 2020, experienced a slight increase to 1.19 in 2021, followed by a consistent decrease thereafter, reaching 0.81 by the end of 2024. This indicates a gradual reduction in the company’s ability to cover its short-term liabilities with its short-term assets.
- Quick Ratio
- The quick ratio follows a similar downward pattern as the current ratio. It increased from 1.02 in 2020 to 1.1 in 2021, then declined steadily to reach 0.71 in 2024. This trend suggests a diminishing level of liquid assets, excluding inventory, relative to current liabilities.
- Cash Ratio
- The cash ratio also declined over the five-year period. Starting at 0.92 in 2020, it slightly improved to 1.01 in 2021, then decreased continuously to 0.62 by 2024. The reduction reflects a weaker cash and cash equivalents position compared to current liabilities.
Overall, the liquidity ratios show a downward trajectory after peaking in 2021, indicating a decreasing liquidity position over time. This may signal increased short-term financial pressures or a change in the company's asset composition, suggesting closer monitoring of liquidity management is warranted going forward.
Current Ratio
United Airlines Holdings Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 18,883) | 18,487) | 20,058) | 21,834) | 14,800) | |
| Current liabilities | 23,314) | 22,203) | 19,992) | 18,304) | 12,725) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 0.81 | 0.83 | 1.00 | 1.19 | 1.16 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| FedEx Corp. | 1.36 | 1.37 | 1.43 | 1.51 | 1.58 | |
| Uber Technologies Inc. | 1.07 | 1.19 | 1.04 | 0.98 | 1.44 | |
| Union Pacific Corp. | 0.77 | 0.81 | 0.72 | 0.62 | 1.01 | |
| United Parcel Service Inc. | 1.17 | 1.10 | 1.22 | 1.42 | 1.19 | |
| Current Ratio, Sector | ||||||
| Transportation | 1.04 | 1.06 | 1.14 | 1.24 | 1.28 | |
| Current Ratio, Industry | ||||||
| Industrials | 1.19 | 1.16 | 1.20 | 1.29 | 1.41 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 18,883 ÷ 23,314 = 0.81
2 Click competitor name to see calculations.
- Current Assets
- Current assets increased significantly from 14,800 million USD at the end of 2020 to a peak of 21,834 million USD in 2021. Following this peak, there was a steady decline to 18,487 million USD in 2023, with a slight rebound to 18,883 million USD in 2024. Overall, current assets remain above the 2020 level despite the downward trend after 2021.
- Current Liabilities
- Current liabilities showed a continuous upward trend throughout the period, rising from 12,725 million USD at the end of 2020 to 23,314 million USD in 2024. This steady increase suggests growing short-term obligations each year, nearly doubling the value over the five-year span.
- Current Ratio
- The current ratio, indicating short-term liquidity, showed a downward trend. It started at 1.16 in 2020, slightly improving to 1.19 in 2021, then declined sharply to 1.00 in 2022 and further decreased below 1.0 in subsequent years, reaching 0.81 by 2024. This decline reflects weakening liquidity, where current liabilities increasingly exceed current assets, potentially implying increased liquidity risk.
Quick Ratio
United Airlines Holdings Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 8,769) | 6,058) | 7,166) | 18,283) | 11,269) | |
| Short-term investments | 5,706) | 8,330) | 9,248) | 123) | 414) | |
| Receivables, net | 2,163) | 1,898) | 1,801) | 1,663) | 1,295) | |
| Total quick assets | 16,638) | 16,286) | 18,215) | 20,069) | 12,978) | |
| Current liabilities | 23,314) | 22,203) | 19,992) | 18,304) | 12,725) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.71 | 0.73 | 0.91 | 1.10 | 1.02 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| FedEx Corp. | 1.24 | 1.25 | 1.31 | 1.40 | 1.45 | |
| Uber Technologies Inc. | 0.95 | 1.02 | 0.88 | 0.82 | 1.19 | |
| Union Pacific Corp. | 0.55 | 0.61 | 0.52 | 0.47 | 0.79 | |
| United Parcel Service Inc. | 1.05 | 0.98 | 1.11 | 1.32 | 1.00 | |
| Quick Ratio, Sector | ||||||
| Transportation | 0.92 | 0.93 | 1.02 | 1.13 | 1.10 | |
| Quick Ratio, Industry | ||||||
| Industrials | 0.69 | 0.66 | 0.72 | 0.80 | 0.87 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 16,638 ÷ 23,314 = 0.71
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets showed an initial increase from 12,978 million US dollars in 2020 to a peak of 20,069 million US dollars in 2021. After this peak, there was a declining trend over the subsequent years, decreasing to 18,215 million in 2022, then to 16,286 million in 2023, with a slight recovery to 16,638 million in 2024. This indicates a reduction in highly liquid assets available for covering short-term obligations after 2021 but with some stabilization toward 2024.
- Current Liabilities
- Current liabilities have steadily increased throughout the period under review, starting at 12,725 million US dollars in 2020 and rising each year to reach 23,314 million in 2024. This consistent upward movement suggests growing short-term obligations, potentially placing increased pressure on the company’s liquidity.
- Quick Ratio
- The quick ratio, a measure of liquidity, initially improved slightly from 1.02 in 2020 to 1.10 in 2021, reflecting a comfortable coverage of current liabilities by liquid assets. However, from 2022 onward, the quick ratio declined sharply to 0.91, then to 0.73 in 2023, and further down to 0.71 in 2024. Ratios below 1 indicate that liquid assets are insufficient to cover current liabilities, highlighting a weakening liquidity position and potential challenges in meeting short-term financial obligations.
Cash Ratio
United Airlines Holdings Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 8,769) | 6,058) | 7,166) | 18,283) | 11,269) | |
| Short-term investments | 5,706) | 8,330) | 9,248) | 123) | 414) | |
| Total cash assets | 14,475) | 14,388) | 16,414) | 18,406) | 11,683) | |
| Current liabilities | 23,314) | 22,203) | 19,992) | 18,304) | 12,725) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.62 | 0.65 | 0.82 | 1.01 | 0.92 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| FedEx Corp. | 0.49 | 0.50 | 0.48 | 0.52 | 0.47 | |
| Uber Technologies Inc. | 0.66 | 0.66 | 0.56 | 0.55 | 1.03 | |
| Union Pacific Corp. | 0.19 | 0.21 | 0.18 | 0.17 | 0.43 | |
| United Parcel Service Inc. | 0.38 | 0.34 | 0.42 | 0.60 | 0.37 | |
| Cash Ratio, Sector | ||||||
| Transportation | 0.51 | 0.51 | 0.55 | 0.65 | 0.62 | |
| Cash Ratio, Industry | ||||||
| Industrials | 0.31 | 0.29 | 0.32 | 0.39 | 0.47 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 14,475 ÷ 23,314 = 0.62
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets exhibited an overall increase from 2020 to 2021, rising from 11,683 million US dollars to 18,406 million US dollars. However, after reaching this peak in 2021, the cash assets showed a declining trend over the subsequent years, dropping to 16,414 million in 2022, further decreasing to 14,388 million in 2023, and stabilizing slightly at 14,475 million in 2024.
- Current liabilities
- Current liabilities have demonstrated a consistent upward trajectory across the reported periods. Starting at 12,725 million US dollars in 2020, the liabilities increased significantly each year, rising to 18,304 million in 2021, 19,992 million in 2022, 22,203 million in 2023, and reaching 23,314 million in 2024.
- Cash ratio
- The cash ratio, indicative of the company's ability to cover current liabilities with its cash assets, peaked at 1.01 in 2021. Since then, it has displayed a downward trend, decreasing to 0.82 in 2022, 0.65 in 2023, and slightly dropping further to 0.62 in 2024. This decline reflects a reduction in liquidity relative to current liabilities over the years.
- Overall analysis
- The data reveals that while cash assets increased substantially in the initial year, the following years showed a reduction in cash reserves coupled with continually rising current liabilities. This combination has led to a declining cash ratio, suggesting increasing liquidity risk. The company’s capacity to cover short-term liabilities with cash has diminished progressively, indicating a potential need for stronger cash flow management or alternative liquidity strategies in the recent periods.