Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Albemarle Corp., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
- Current Ratio
- The current ratio exhibited fluctuations throughout the period under review. Early in 2019, it started moderately at 1.55, followed by a gradual decline towards the end of that year, bottoming at 1.22 by December 2020. In the first half of 2021, the ratio peaked significantly, reaching above 2.0, indicating an improved liquidity position. However, this was followed by a sharp decrease by the end of 2021, reaching as low as 1.07. Subsequently, the ratio recovered throughout 2022 and remained fairly stable around 1.9 into the first quarter of 2023. Overall, the current ratio reflects periods of strengthening liquidity interspersed with notable declines, implying variability in the company's short-term financial stability.
- Quick Ratio
- The quick ratio largely mirrored the trend seen in the current ratio but at consistently lower values, as expected given the exclusion of inventories. It started at 0.88 in early 2019 and experienced a gradual decline towards the end of 2020, falling below 0.75. A substantial increase occurred in the first half of 2021, peaking at 1.36, indicating improved immediate liquidity. This was followed by a sharp decline to 0.57 by the end of 2021, representing the lowest point in the observed timeframe. During 2022, the quick ratio showed recovery, rising above 1.0 at times but slightly declining to 0.93 by the first quarter of 2023. This variability suggests fluctuating levels of liquid assets relative to current liabilities, likely influenced by changes in working capital management or short-term obligations.
- Cash Ratio
- The cash ratio remained the lowest among the liquidity metrics throughout the period, indicating a more conservative measure of liquidity focused solely on cash and cash equivalents. It started at 0.36 in early 2019, experiencing a general decline until late 2019, followed by moderate increases peaking at 0.84 during mid-2021. Afterward, the ratio decreased significantly towards the end of 2021, dropping to near 0.23, the lowest point in the dataset. A recovery trend is observed in 2022, with values stabilizing between 0.5 and 0.56 before a slight decline to 0.45 in early 2023. This pattern suggests fluctuations in immediate cash availability, reflecting changes in cash management or cash inflows and outflows relative to current liabilities.
Current Ratio
Albemarle Corp., current ratio calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current assets | 6,657,575) | 5,186,917) | 4,296,971) | 3,350,104) | 2,336,483) | 2,007,981) | 2,078,106) | 2,151,354) | 2,009,394) | 2,206,184) | 2,227,012) | 2,292,409) | 2,155,181) | 2,225,109) | 1,969,752) | 2,036,637) | 1,987,176) | ||||||
| Current liabilities | 3,505,369) | 2,741,015) | 2,487,951) | 1,781,762) | 2,103,338) | 1,874,335) | 1,591,042) | 984,928) | 953,256) | 1,801,849) | 1,612,739) | 1,420,803) | 1,192,926) | 1,408,996) | 1,421,243) | 1,399,981) | 1,278,191) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Current ratio1 | 1.90 | 1.89 | 1.73 | 1.88 | 1.11 | 1.07 | 1.31 | 2.18 | 2.11 | 1.22 | 1.38 | 1.61 | 1.81 | 1.58 | 1.39 | 1.45 | 1.55 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||
| Linde plc | 0.73 | 0.79 | 0.74 | 0.74 | 0.84 | 0.74 | 0.81 | 0.71 | 0.74 | — | — | — | — | — | — | — | — | ||||||
| Sherwin-Williams Co. | 1.00 | 0.99 | 1.00 | 0.87 | 0.88 | 0.88 | 0.83 | 0.84 | 0.90 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= 6,657,575 ÷ 3,505,369 = 1.90
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable fluctuations in the company's liquidity position over the observed periods. The current assets show an overall upward trend from early 2019 through the first quarter of 2023, with values increasing significantly, especially from mid-2021 onwards, where there is a marked acceleration in growth reaching the highest recorded value in the latest quarter. This indicates a progressive expansion in the company's short-term resources available for meeting obligations.
Current liabilities demonstrate a more volatile pattern with peaks and troughs observed throughout the quarters. Initial quarters show a steady level with some increases, particularly toward the end of 2020 and 2021. From early 2022 to the first quarter of 2023, current liabilities rise substantially, reflecting potentially increased short-term obligations or operational scaling.
The current ratio, a critical indicator of liquidity, reflects these dynamics as it fluctuates within a range but remains above 1.0 in all periods, signaling that current assets consistently cover current liabilities. The ratio peaks around early 2021, suggesting a relatively stronger liquidity position at that time, but declines somewhat by the end of 2021. However, from 2022 onwards, it recovers again, remaining close to or above 1.8 by the first quarter of 2023, implying improving ability to meet short-term liabilities despite the rise in current liabilities.
Overall, the liquidity position experienced periods of strengthening and weakening, with an evident improvement in current assets outpacing liabilities particularly in the most recent quarters. This suggests enhanced capacity to cover short-term obligations, although the upward trend in current liabilities may warrant closer monitoring going forward.
- Current Assets
- Generally increasing with significant growth from mid-2021 to early 2023, peaking at the end of the dataset.
- Current Liabilities
- Fluctuating with noted increases at the end of 2020 and through 2022, reaching the highest point in early 2023.
- Current Ratio
- Consistently above 1.0, indicating sufficient short-term asset coverage of liabilities; highest around early 2021, dipping by late 2021, and improving substantially in 2022 and early 2023.
Quick Ratio
Albemarle Corp., quick ratio calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Cash and cash equivalents | 1,586,734) | 1,499,142) | 1,382,803) | 930,596) | 463,325) | 439,272) | 595,049) | 823,572) | 569,859) | 746,724) | 702,073) | 736,696) | 553,228) | 613,110) | 317,823) | 398,183) | 465,274) | ||||||
| Trade accounts receivable, less allowance for doubtful accounts | 1,351,915) | 1,190,970) | 1,035,117) | 962,215) | 658,733) | 556,922) | 520,746) | 455,222) | 532,964) | 530,838) | 516,166) | 517,626) | 518,703) | 612,651) | 637,037) | 624,808) | 603,542) | ||||||
| Other accounts receivable | 312,560) | 185,819) | 135,709) | 124,409) | 71,225) | 66,184) | 56,298) | 58,256) | 60,558) | 61,958) | 61,522) | 76,957) | 73,765) | 67,551) | 86,556) | 105,207) | 57,019) | ||||||
| Total quick assets | 3,251,209) | 2,875,931) | 2,553,629) | 2,017,220) | 1,193,283) | 1,062,378) | 1,172,093) | 1,337,050) | 1,163,381) | 1,339,520) | 1,279,761) | 1,331,279) | 1,145,696) | 1,293,312) | 1,041,416) | 1,128,198) | 1,125,835) | ||||||
| Current liabilities | 3,505,369) | 2,741,015) | 2,487,951) | 1,781,762) | 2,103,338) | 1,874,335) | 1,591,042) | 984,928) | 953,256) | 1,801,849) | 1,612,739) | 1,420,803) | 1,192,926) | 1,408,996) | 1,421,243) | 1,399,981) | 1,278,191) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Quick ratio1 | 0.93 | 1.05 | 1.03 | 1.13 | 0.57 | 0.57 | 0.74 | 1.36 | 1.22 | 0.74 | 0.79 | 0.94 | 0.96 | 0.92 | 0.73 | 0.81 | 0.88 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||
| Linde plc | 0.56 | 0.61 | 0.56 | 0.56 | 0.65 | 0.55 | 0.63 | 0.52 | 0.56 | — | — | — | — | — | — | — | — | ||||||
| Sherwin-Williams Co. | 0.49 | 0.46 | 0.50 | 0.46 | 0.46 | 0.44 | 0.45 | 0.45 | 0.48 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 3,251,209 ÷ 3,505,369 = 0.93
2 Click competitor name to see calculations.
- Quick Assets Trend
- The total quick assets exhibit a fluctuating pattern from March 2019 through March 2023. Initially, there is a slight decrease reaching the lowest point near the end of 2019. From early 2020 to early 2021, values oscillate without a clear trend but begin a significant upward trajectory starting mid-2022, peaking in the first quarter of 2023. This indicates growing liquidity over the last several quarters analyzed.
- Current Liabilities Trend
- Current liabilities show considerable volatility throughout the period. There is an initial increase until the end of 2019 followed by a sharp drop in the first half of 2021. Subsequently, liabilities climb steadily and markedly from mid-2021 through the first quarter of 2023, reaching the highest observed values. This rising liability trend in recent quarters suggests increased short-term obligations.
- Quick Ratio Trend
- The quick ratio fluctuates significantly over the period with no consistent upward or downward trend. It shows moderate values around 0.8 to 0.9 in 2019 and early 2020, then declines notably by the end of 2020. In 2021, the ratio increases above 1, demonstrating improved liquidity, but then falls below 1 again toward the end of 2021 and early 2022. A recovery occurs mid-2022 continuing through early 2023, but the ratio remains slightly below or near 1, indicating liquidity close to the threshold considered adequate but not strongly robust.
- Liquidity Analysis
- The interplay between rising current liabilities and the growth in quick assets results in fluctuating liquidity. Periods where liabilities outpace quick assets lead to quick ratios below 1, signaling potential liquidity risk. However, the improvements noted in late 2022 and early 2023 suggest efforts to enhance liquidity position despite increasing liabilities. Overall, liquidity appears managed but with periods of strain.
Cash Ratio
Albemarle Corp., cash ratio calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Cash and cash equivalents | 1,586,734) | 1,499,142) | 1,382,803) | 930,596) | 463,325) | 439,272) | 595,049) | 823,572) | 569,859) | 746,724) | 702,073) | 736,696) | 553,228) | 613,110) | 317,823) | 398,183) | 465,274) | ||||||
| Total cash assets | 1,586,734) | 1,499,142) | 1,382,803) | 930,596) | 463,325) | 439,272) | 595,049) | 823,572) | 569,859) | 746,724) | 702,073) | 736,696) | 553,228) | 613,110) | 317,823) | 398,183) | 465,274) | ||||||
| Current liabilities | 3,505,369) | 2,741,015) | 2,487,951) | 1,781,762) | 2,103,338) | 1,874,335) | 1,591,042) | 984,928) | 953,256) | 1,801,849) | 1,612,739) | 1,420,803) | 1,192,926) | 1,408,996) | 1,421,243) | 1,399,981) | 1,278,191) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Cash ratio1 | 0.45 | 0.55 | 0.56 | 0.52 | 0.22 | 0.23 | 0.37 | 0.84 | 0.60 | 0.41 | 0.44 | 0.52 | 0.46 | 0.44 | 0.22 | 0.28 | 0.36 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||
| Linde plc | 0.28 | 0.33 | 0.25 | 0.24 | 0.31 | 0.21 | 0.32 | 0.21 | 0.27 | — | — | — | — | — | — | — | — | ||||||
| Sherwin-Williams Co. | 0.02 | 0.03 | 0.02 | 0.04 | 0.06 | 0.03 | 0.05 | 0.04 | 0.06 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 1,586,734 ÷ 3,505,369 = 0.45
2 Click competitor name to see calculations.
The financial data reveal distinct patterns in the cash assets, current liabilities, and liquidity position over the observed periods. Total cash assets demonstrate a fluctuating but overall increasing trend, with notable growth starting mid-2021 that continues through the first quarter of 2023. This uptrend signals strengthened cash reserves, reaching their peak in the latest quarter.
Current liabilities show a varying pattern characterized by fluctuations within earlier periods, followed by a pronounced and sustained upward trend starting roughly in mid-2021 and extending through early 2023. The increase in current liabilities outpaces the growth in cash assets during this latter period, indicating a rising short-term debt or obligations load.
The cash ratio exhibits considerable volatility, reflecting changes in liquidity relative to current liabilities. Early on, liquidity ratios fluctuate between low and moderate values, even reaching a peak in mid-2021 that corresponds with elevated cash holdings and relatively stable liabilities. However, following this peak, the ratio declines sharply toward late 2021 before rebounding again in subsequent periods. Despite the improvement in cash ratio during 2022, the ratio slightly decreases in the first quarter of 2023, suggesting that the increase in current liabilities may be beginning to outstrip gains in cash reserves.
- Total Cash Assets
- A fluctuating trend was noted up to 2019, followed by growth with intermittent dips. Beginning mid-2021, a strong increase is evident, culminating in over threefold growth compared to the earliest period in 2019.
- Current Liabilities
- Liabilities exhibit variability before mid-2021, after which a sharp and consistent rise occurs, almost doubling from early 2021 to the first quarter of 2023, highlighting increased short-term obligations.
- Cash Ratio
- Liquidity ratios varied significantly, peaking around mid-2021, reflecting robust liquidity. Post-peak, the ratio declined substantially but recovered during 2022 before showing a slight reduction in early 2023, indicating closer pressure on liquidity relative to current liabilities.
Overall, the company’s liquidity position improved notably through 2021 and 2022, supported by surging cash assets. However, the rapid increase in current liabilities in the most recent periods warrants attention as it may pose challenges to maintaining liquidity if cash growth slows or reverses.