Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Income Statement
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2005
- Aggregate Accruals
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Liquidity Ratios (Summary)
FedEx Corp., liquidity ratios
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Current ratio | |||||||
| Quick ratio | |||||||
| Cash ratio |
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
- Current Ratio
- The current ratio exhibited a modest increase from 1.45 in 2019 to a peak of 1.58 in 2020. Subsequently, it demonstrated a gradual decline each year, reaching 1.36 by 2024. This downward trend after 2020 indicates a slight reduction in the company's ability to cover its short-term liabilities with current assets over the recent years.
- Quick Ratio
- The quick ratio mirrored a similar pattern to the current ratio, rising from 1.27 in 2019 to 1.45 in 2020, followed by a steady decrease to 1.24 in 2024. This reflects a decreasing liquidity position when considering only the most liquid assets, excluding inventories, suggesting a cautious reduction in immediate liquidity.
- Cash Ratio
- The cash ratio showed a contrasting trend, improving significantly from 0.26 in 2019 to 0.52 in 2021. Although it slightly declined to 0.48 in 2022, it stabilized around 0.49 to 0.50 in the following years. This indicates an enhanced ability to meet short-term obligations with cash and cash equivalents, maintaining a relatively stable and improved cash position after 2019.
Current Ratio
FedEx Corp., current ratio calculation, comparison to benchmarks
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current assets | |||||||
| Current liabilities | |||||||
| Liquidity Ratio | |||||||
| Current ratio1 | |||||||
| Benchmarks | |||||||
| Current Ratio, Competitors2 | |||||||
| Uber Technologies Inc. | |||||||
| Union Pacific Corp. | |||||||
| United Airlines Holdings Inc. | |||||||
| United Parcel Service Inc. | |||||||
| Current Ratio, Sector | |||||||
| Transportation | |||||||
| Current Ratio, Industry | |||||||
| Industrials | |||||||
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets Trend
- Current assets exhibited an increasing trend from May 31, 2019 to May 31, 2021, rising from 13,086 million US dollars to 20,580 million US dollars. However, after this peak, there was a gradual decline over the subsequent years, reducing to 18,207 million US dollars by May 31, 2024.
- Current Liabilities Trend
- Current liabilities showed a consistent upward trajectory from May 31, 2019 through May 31, 2022, increasing from 9,013 million US dollars to 14,274 million US dollars. Following this period, a slight decrease occurred, resulting in current liabilities of 13,355 million US dollars by May 31, 2024.
- Current Ratio Analysis
- The current ratio started at 1.45 in May 2019, improved to a high of 1.58 in May 2020, indicating strengthened short-term liquidity. Subsequently, it experienced a gradual decline across the following years, concluding at 1.36 as of May 31, 2024. Despite the decrease, the ratio remained above 1.0, suggesting that current assets continue to exceed current liabilities.
- Overall Liquidity Observations
- The data indicates initial improvements in liquidity and working capital position up to 2020-2021, driven by significant growth in current assets outpacing liabilities. From 2022 onward, however, liquidity indicators slightly weakened as both current assets and liabilities diminished, with current liabilities remaining relatively high. The sustained above-1 current ratio suggests maintained, though slightly reduced, capacity to meet short-term obligations.
Quick Ratio
FedEx Corp., quick ratio calculation, comparison to benchmarks
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | |||||||
| Receivables, less allowances | |||||||
| Total quick assets | |||||||
| Current liabilities | |||||||
| Liquidity Ratio | |||||||
| Quick ratio1 | |||||||
| Benchmarks | |||||||
| Quick Ratio, Competitors2 | |||||||
| Uber Technologies Inc. | |||||||
| Union Pacific Corp. | |||||||
| United Airlines Holdings Inc. | |||||||
| United Parcel Service Inc. | |||||||
| Quick Ratio, Sector | |||||||
| Transportation | |||||||
| Quick Ratio, Industry | |||||||
| Industrials | |||||||
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- Over the six-year period, total quick assets display an overall upward trend from 11,435 million USD in 2019 to a peak of 19,156 million USD in 2021. Following this peak, there is a noticeable decline to 18,760 million USD in 2022 and a more pronounced decrease in subsequent years, reaching 16,588 million USD by 2024. This pattern indicates initial growth in liquid assets followed by a contraction in the most recent years.
- Current Liabilities
- Current liabilities increase consistently from 9,013 million USD in 2019 to a high of 14,274 million USD in 2022. After this peak, liabilities decrease modestly to 13,355 million USD by 2024. The data suggest rising short-term obligations until 2022, followed by slight reduction efforts or natural decrease thereafter.
- Quick Ratio
- The quick ratio begins at 1.27 in 2019, rises to a peak of 1.45 in 2020, and then experiences a gradual decline down to 1.24 in 2024. Despite this downward trend, the quick ratio remains above 1.2 throughout the period, indicating sufficient short-term liquidity to cover current liabilities. The peak in 2020 suggests a temporarily strengthened liquidity position which has since moderated but remains above the threshold of immediate concern.
- Overall Observations
- The financial data demonstrate an increase in quick assets and current liabilities over the initial years, with both peaking around 2021-2022. Subsequently, a decline in total quick assets coincides with a minor reduction in current liabilities resulting in a modest decrease in the quick ratio. Despite these shifts, the company's liquidity appears to be maintained at a relatively stable level, with the quick ratio consistently above one, indicating an ability to meet short-term obligations without liquidating inventory.
Cash Ratio
FedEx Corp., cash ratio calculation, comparison to benchmarks
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | |||||||
| Total cash assets | |||||||
| Current liabilities | |||||||
| Liquidity Ratio | |||||||
| Cash ratio1 | |||||||
| Benchmarks | |||||||
| Cash Ratio, Competitors2 | |||||||
| Uber Technologies Inc. | |||||||
| Union Pacific Corp. | |||||||
| United Airlines Holdings Inc. | |||||||
| United Parcel Service Inc. | |||||||
| Cash Ratio, Sector | |||||||
| Transportation | |||||||
| Cash Ratio, Industry | |||||||
| Industrials | |||||||
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- Over the analyzed period, total cash assets exhibited a significant upward trend from 2019 to 2021, increasing from 2,319 million USD to a peak of 7,087 million USD. This was followed by a slight decline in subsequent years, with values stabilizing around the 6,500 to 6,900 million USD range by 2024. The initial growth suggests an accumulation of liquid resources, while the later plateau and mild decrease may indicate increased cash utilization or reallocation of resources.
- Current Liabilities
- Current liabilities demonstrated a consistent growth over the six years, rising from 9,013 million USD in 2019 to a high of 14,274 million USD in 2022. Thereafter, a modest reduction occurred, with liabilities decreasing to approximately 13,355 million USD by 2024. The general upward trend corresponds with an expanding obligation profile, potentially reflecting business growth or increased short-term financial commitments.
- Cash Ratio
- The cash ratio, indicating liquidity by comparing cash assets to current liabilities, followed a progressively improving trend from 0.26 in 2019 to a peak of 0.52 in 2021. Following this peak, the ratio slightly declined but remained relatively stable around 0.48 to 0.50 in the subsequent years through 2024. This pattern implies an enhanced liquidity position over the period, particularly up to 2021, with a maintenance of a satisfactory ability to cover current liabilities with cash thereafter.
- Overall Insights
- The data reflects an improvement in liquidity and cash management efficiency during the early years, as shown by increasing cash reserves and cash ratios. However, the steady rise in current liabilities suggests expanding operations or obligations that could exert pressure on liquidity if cash reserves are not managed prudently. The stabilization of cash assets and the cash ratio in more recent years indicates a balancing approach to managing short-term financial resources alongside growing liabilities.