General Dynamics Corp. (NYSE:GD)

Current Ratio

The current ratio exhibits moderate fluctuations over the analyzed periods, generally maintaining a range between approximately 1.1 and 1.4. Beginning at 1.25 in early 2015, it slightly declined and then showed minor upward movements peaking around 1.4 at the end of 2017. From 2018 onward, the ratio experienced some variability but remained close to the 1.2 to 1.3 range, ending at approximately 1.29 in late 2020. This indicates a relatively stable ability to cover current liabilities with current assets, though no significant upward or downward trend is evident.

Quick Ratio

The quick ratio generally follows a declining trend from 2015 through 2019, starting near 0.95 and dropping to around 0.66 by late 2019. Notable decreases occur around 2017 and 2019, with a recovery beginning in early 2020, where the ratio increases back towards the 0.8 to 0.9 range by late 2020. This suggests that the company's most liquid current assets (excluding inventories) became relatively less sufficient to cover current liabilities for much of the period but improved somewhat in 2020.

Cash Ratio

The cash ratio demonstrates a more pronounced downward trend over the majority of the periods, starting at approximately 0.34 in early 2015 and declining sharply through 2019 to very low levels around 0.04 to 0.05. There is a brief and significant improvement in mid-2020, with the ratio rising to 0.29 before settling again near 0.09 by the end of the dataset. This pattern reflects a reduction in the most liquid form of assets (cash and cash equivalents) relative to current liabilities for most of the timeline, with a short-term liquidity boost observed in 2020.

Current Assets

The current assets displayed a general upward trend over the observed periods, starting at 16,352 million USD in April 2015 and gradually increasing to a peak of 24,741 million USD in March 2020. Between April 2015 and December 2015, current assets decreased slightly from 16,352 million to 14,571 million USD, indicating a contraction. Afterward, there was a steady recovery and growth through 2016 and 2017, reaching 18,328 million USD by December 2017. The asset base expanded further in 2018 to a high of 20,464 million USD around April, though some volatility was present with a notable dip in the last quarter of 2018. There was considerable volatility in 2019, yet values remained above 18,000 million USD. The largest surge was observed in early 2020, reaching 24,741 million USD, followed by a decrease by the third quarter of 2020.

Current Liabilities

Current liabilities showed variations within a narrower range but with a generally increasing tendency from April 2015 to mid-2020. The period started at 13,112 million USD and recorded a slight decline until the first quarter of 2016, followed by fluctuating levels around 12,000 to 13,000 million USD for most of 2016 and 2017. A notable rise in current liabilities began in early 2018, peaking in June 2019 at 18,014 million USD, reflecting increased short-term obligations. After this peak, there was a moderate decline towards the middle of 2020, ending at 16,120 million USD in September 2020. Overall, the upward trend in liabilities paralleled the expansion in assets, indicating increased operational scale or liquidity management adjustments.

Current Ratio

The current ratio fluctuated within the 1.09 to 1.4 range, evidencing relatively stable liquidity throughout the periods. Initially, the ratio hovered around 1.2 to 1.3, reflecting a modest buffer of current assets over current liabilities. There was a slight decline starting in late 2015 and early 2016, dropping close to 1.14, before recovering to a peak of 1.4 by the end of 2017, suggesting improved short-term financial health during that period. The ratio then moderated and showed some volatility through 2018 and 2019, with a minimum around 1.09, indicating periods of tighter liquidity. In 2020, the ratio strengthened again to about 1.34 in March, coinciding with the peak in current assets, and remained above 1.2 thereafter. Throughout the timeframe, the company maintained a current ratio above 1, signifying sufficient liquid assets to cover short-term liabilities consistently.

The analysis of the quarterly financial data reveals several trends in liquidity and short-term financial position over the periods examined.

Total Quick Assets

Total quick assets demonstrate some fluctuation across the quarters but generally display a downward trend from April 2015 through the end of 2018. Initially, the values decrease from 12,517 million USD in April 2015 to a low near 10,208 million USD by April 2017, with some intermittent increases in late 2016 and 2017. Subsequently, from early 2018, quick assets slightly recover, reaching a peak of approximately 13,966 million USD in the first quarter of 2018 before declining again towards early 2019. Mid to late 2019 shows an upward move to 12,540 million USD, jumping sharply to 16,815 million USD in March 2020, followed by a decrease in the subsequent quarters of 2020, ending at 13,475 million USD.

Current Liabilities

Current liabilities exhibit a general increase over the timeline. From 13,112 million USD in April 2015, liabilities have grown with periodic fluctuations, reaching as high as approximately 18,440 million USD in March 2020. Notably, liabilities increase steadily in the last quarters of 2018 and throughout 2019, peaking in early 2020 before slightly decreasing toward the end of the available data in 2020.

Quick Ratio

The quick ratio, representing the relationship between quick assets and current liabilities, mostly remains below 1.0, indicating a potential liquidity challenge. It starts near 0.95 in April 2015 and generally trends downward through 2017 and 2018, reaching lows around 0.66 in mid-2019. Despite occasional improvements, especially in early 2020 where it rises to 0.91, the ratio does not consistently reach or exceed 1.0. This pattern suggests that the company’s quick assets have frequently been insufficient to cover current liabilities fully.

Overall, the data reflects tightening liquidity conditions with quick assets not keeping pace with growing current liabilities for much of the observed period. However, the spike in quick assets in early 2020 and the corresponding increase in the quick ratio indicate a temporary improvement in liquidity. Continuous monitoring is advisable as quick ratio values remain below 1.0 in many periods, suggesting potential challenges in meeting short-term obligations without relying on inventory sales or additional financing.

Total cash assets

The total cash assets displayed a declining trend from April 2015 through December 2018, starting at 4,412 million US dollars and reducing to a low of 673 million US dollars by March 2019. There was a slight recovery observed in subsequent quarters, peaking notably at 5,330 million US dollars in June 2020 before again declining to 1,469 million US dollars by September 2020. The fluctuations indicate volatility in cash holdings, with a pronounced trough in early 2019 followed by a temporary surge in mid-2020.

Current liabilities

Current liabilities remained relatively stable with some fluctuations across the periods. Initially, values oscillated between roughly 12,000 and 13,500 million US dollars from 2015 through 2017, then generally increased from 15,242 million US dollars in April 2018 to a peak of 18,440 million US dollars in March 2020. A slight decline followed in the last two quarters of the dataset, ending at 16,120 million US dollars in September 2020. Overall, there is an upward trend in liabilities over the five-year span, particularly from 2018 onward.

Cash ratio

The cash ratio, which measures the ability to cover short-term liabilities with cash assets, shows a declining trend from early 2015, starting at 0.34 and dropping to 0.04 by March 2019. Minor increases occurred intermittently, but ratios mostly stayed below 0.10 through 2019 and early 2020. An abrupt improvement is evident at mid-2020, spiking to 0.29 in June 2020 before falling again to 0.09 in September 2020. This pattern parallels cash asset fluctuations and suggests periods of constrained liquidity with episodic strengthening.

General observations

The data reveals a general pattern of decreasing liquidity between 2015 and early 2019, with cash reserves shrinking while current liabilities gradually rose, leading to lower coverage ratios. The mid-2020 period stands out as an anomaly with a significant boost in cash assets and cash ratio, possibly indicative of extraordinary liquidity events during that time. Despite this spike, liquidity levels remained generally low compared to earlier years, highlighting ongoing challenges in managing short-term financial obligations.