Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
General Dynamics Corp., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
- Current Ratio
- The current ratio exhibited moderate fluctuations over the periods analyzed, generally remaining above 1.0, indicating that the company maintained sufficient current assets relative to current liabilities. Starting at 1.14, the ratio increased gradually to peak around 1.4 by the end of 2017, suggesting improved short-term liquidity. Following this peak, there was a slight decline and stabilization, with ratios mostly ranging between 1.09 and 1.34. Towards the end of the period, the ratio showed a modest upward trend again, ending near 1.29. Overall, this reflects a stable liquidity position with some variability likely linked to seasonal or operational factors.
- Quick Ratio
- The quick ratio showed a less consistent pattern, revealing some volatility in the company’s ability to cover short-term obligations without relying on inventory sales. It began at 0.83 and generally trended upward until late 2017, reaching around 0.9, which denotes improved liquid asset coverage. However, from 2018 onward, the ratio declined, reaching a low of approximately 0.66 in mid-2019, before recovering partially to about 0.84 by late 2020. This decrease and subsequent partial recovery suggest fluctuations in liquid assets excluding inventory, possibly reflecting changes in accounts receivable, cash holdings, or short-term investments over time.
- Cash Ratio
- The cash ratio demonstrated significant variability, reflecting considerable changes in the most liquid assets relative to current liabilities. Initially, it progressed upward from 0.15 to a peak of 0.28 in early 2018, indicating a period of relatively strong cash holdings. Afterward, the cash ratio declined sharply to levels as low as 0.04 by early 2019, pointing to a reduction in cash reserves relative to current liabilities. From mid-2019 to late 2020, the ratio experienced a resurgence, reaching nearly 0.29 mid-2020 before settling around 0.09. These fluctuations could hint at strategic cash management decisions, operational cash flow variations, or timing differences in cash collections and payments.
Current Ratio
General Dynamics Corp., current ratio calculation (quarterly data)
| Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Current assets | 20,865) | 21,135) | 24,741) | 19,780) | 20,151) | 19,557) | 18,867) | 18,189) | 19,958) | 19,827) | 20,464) | 18,328) | 18,080) | 17,126) | 16,614) | 15,447) | 15,297) | 14,386) | 14,188) | ||||||
| Current liabilities | 16,120) | 16,606) | 18,440) | 16,801) | 18,227) | 18,014) | 15,382) | 14,739) | 15,689) | 16,573) | 15,242) | 13,099) | 13,209) | 13,503) | 13,165) | 12,846) | 11,893) | 12,135) | 12,423) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Current ratio1 | 1.29 | 1.27 | 1.34 | 1.18 | 1.11 | 1.09 | 1.23 | 1.23 | 1.27 | 1.20 | 1.34 | 1.40 | 1.37 | 1.27 | 1.26 | 1.20 | 1.29 | 1.19 | 1.14 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q3 2020 Calculation
Current ratio = Current assets ÷ Current liabilities
= 20,865 ÷ 16,120 = 1.29
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibit a generally upward trend over the periods analyzed. Beginning at approximately $14.2 billion in early April 2016, the value rises consistently to peak near $24.7 billion by late March 2020. Notable increases appear especially around early 2018 and early 2020, although a slight decline is observed toward the last reported quarter. The overall increase suggests growing liquidity or asset accumulation within the short-term horizon.
- Current Liabilities
- Current liabilities also display a rising pattern across the quarters, moving from about $12.4 billion in April 2016 to roughly $16.1 billion by the end of September 2020. Fluctuations occur, particularly with a peak around mid-2019, followed by a decrease and another rise approaching early 2020. Despite these variations, the general increase indicates an escalation in short-term obligations alongside asset growth.
- Current Ratio
- The current ratio remains consistently above 1.0 throughout the periods, reflecting the company's ability to cover short-term liabilities with current assets. Initially around 1.14, the ratio increases to highs near 1.4 by the end of 2017, showing a strengthening liquidity position. Subsequently, it trends slightly downward through 2018 and mid-2019, reaching near 1.09, possibly due to rising liabilities or slightly reduced asset growth. However, the ratio recovers toward 1.29 by late 2020, indicating stabilization in liquidity. This fluctuation suggests the company maintained a generally healthy liquidity balance, with some periods of tighter short-term financial flexibility.
Quick Ratio
General Dynamics Corp., quick ratio calculation (quarterly data)
| Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Cash and equivalents | 1,469) | 2,300) | 5,330) | 902) | 974) | 702) | 673) | 963) | 1,010) | 1,862) | 4,332) | 2,983) | 2,722) | 1,856) | 2,168) | 2,334) | 2,303) | 1,899) | 1,907) | ||||||
| Accounts receivable | 3,863) | 3,515) | 3,547) | 3,544) | 3,489) | 3,673) | 3,718) | 3,759) | 3,736) | 3,874) | 3,769) | 3,617) | 3,391) | 3,690) | 3,483) | 3,611) | 3,502) | 3,539) | 3,654) | ||||||
| Unbilled receivables | 8,143) | 7,715) | 7,938) | 7,857) | 8,077) | 7,554) | 7,367) | 6,576) | 7,564) | 7,125) | 5,865) | 5,240) | 5,609) | 5,045) | 4,557) | 5,282) | 5,213) | 4,996) | 4,705) | ||||||
| Total quick assets | 13,475) | 13,530) | 16,815) | 12,303) | 12,540) | 11,929) | 11,758) | 11,298) | 12,310) | 12,861) | 13,966) | 11,840) | 11,722) | 10,591) | 10,208) | 11,227) | 11,018) | 10,434) | 10,266) | ||||||
| Current liabilities | 16,120) | 16,606) | 18,440) | 16,801) | 18,227) | 18,014) | 15,382) | 14,739) | 15,689) | 16,573) | 15,242) | 13,099) | 13,209) | 13,503) | 13,165) | 12,846) | 11,893) | 12,135) | 12,423) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Quick ratio1 | 0.84 | 0.81 | 0.91 | 0.73 | 0.69 | 0.66 | 0.76 | 0.77 | 0.78 | 0.78 | 0.92 | 0.90 | 0.89 | 0.78 | 0.78 | 0.87 | 0.93 | 0.86 | 0.83 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q3 2020 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 13,475 ÷ 16,120 = 0.84
2 Click competitor name to see calculations.
- Trend Analysis of Total Quick Assets
- The total quick assets exhibited a general upward trajectory from early 2016 through mid-2019, increasing notably from $10,266 million in April 2016 to a peak of $12,540 million in September 2019. However, the fourth quarter of 2018 showed a temporary decline. Subsequently, there was a sharp increase to $16,815 million in the first quarter of 2020, followed by a decrease through the third quarter of 2020, stabilizing around $13,475 million.
- Trend Analysis of Current Liabilities
- Current liabilities showed an increasing trend throughout the timeline. From $12,423 million in April 2016, current liabilities rose gradually with some fluctuations, reaching a peak of $18,440 million in March 2020. After this peak, there was a decline through the third quarter of 2020, settling around $16,120 million. The fluctuations indicate periods of varying short-term obligations, with a significant increase in the first quarter of 2020.
- Trend Analysis of the Quick Ratio
- The quick ratio started below 1 at 0.83 in April 2016, indicating quick assets were insufficient to cover current liabilities initially. The ratio fluctuated slightly until mid-2017, generally ranging between 0.78 and 0.9. It reached its lowest point of 0.66 in June 2019, reflecting increasing current liabilities outpacing quick assets. Notably, there was a marked improvement to 0.91 in March 2020, corresponding with the surge in quick assets. The ratio declined somewhat afterward but remained above levels observed in mid-2019.
- Key Insights
- The company's liquidity position, as measured by the quick ratio, remained below the optimal level of 1 for most of the period, signaling potential liquidity constraints. The substantial increase in quick assets in early 2020 appears to temporarily strengthen liquidity, likely in response to increased short-term obligations. The overall upward trend in current liabilities emphasizes a growing short-term debt load that must be monitored carefully. The interplay between increasing liabilities and quick assets underlines the importance of managing working capital efficiently to maintain sufficient liquidity.
- Summary
- Overall, the data points to a company experiencing increasing short-term liabilities alongside growth in liquid assets, with liquidity ratios reflecting periods of pressure mitigated by strategic asset management. Attention to the quick ratio fluctuations suggests ongoing efforts to balance short-term obligations with readily available assets, especially around the first quarter of 2020 where significant liquidity improvements were observed.
Cash Ratio
General Dynamics Corp., cash ratio calculation (quarterly data)
| Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Cash and equivalents | 1,469) | 2,300) | 5,330) | 902) | 974) | 702) | 673) | 963) | 1,010) | 1,862) | 4,332) | 2,983) | 2,722) | 1,856) | 2,168) | 2,334) | 2,303) | 1,899) | 1,907) | ||||||
| Total cash assets | 1,469) | 2,300) | 5,330) | 902) | 974) | 702) | 673) | 963) | 1,010) | 1,862) | 4,332) | 2,983) | 2,722) | 1,856) | 2,168) | 2,334) | 2,303) | 1,899) | 1,907) | ||||||
| Current liabilities | 16,120) | 16,606) | 18,440) | 16,801) | 18,227) | 18,014) | 15,382) | 14,739) | 15,689) | 16,573) | 15,242) | 13,099) | 13,209) | 13,503) | 13,165) | 12,846) | 11,893) | 12,135) | 12,423) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Cash ratio1 | 0.09 | 0.14 | 0.29 | 0.05 | 0.05 | 0.04 | 0.04 | 0.07 | 0.06 | 0.11 | 0.28 | 0.23 | 0.21 | 0.14 | 0.16 | 0.18 | 0.19 | 0.16 | 0.15 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q3 2020 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 1,469 ÷ 16,120 = 0.09
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited considerable fluctuations over the analyzed quarters. Initially, cash holdings were relatively stable, ranging between approximately $1.9 billion and $3 billion from early 2016 through the end of 2017. A notable peak occurred in the first quarter of 2018, reaching about $4.3 billion, followed by a marked decline to below $1 billion by the fourth quarter of 2018. The early 2019 period saw low cash levels, with slight improvements toward the end of 2019. Another significant surge in cash assets was observed in the first quarter of 2020, reaching $5.3 billion, the highest point in the dataset, before declining again in subsequent quarters to levels closer to those seen in earlier periods.
- Current Liabilities
- Current liabilities demonstrated a generally upward trajectory throughout the period. Starting from approximately $12.4 billion in early 2016, liabilities gradually increased to over $13 billion by the end of 2017. A more pronounced rise occurred in 2018, with values peaking near $16.5 billion mid-year, before slightly decreasing toward the end of that year. Throughout 2019 and 2020, current liabilities remained elevated, fluctuating around $16 billion to $18 billion, indicating increased short-term obligations compared to earlier periods.
- Cash Ratio
- The cash ratio, representing the liquidity in terms of cash relative to current liabilities, generally mirrored the variability seen in cash assets. The ratio stayed low throughout the entire period, mostly below 0.3, signaling limited cash coverage of current obligations. Notably, the ratio peaked at 0.28 in early 2018 in line with the cash assets spike but then sharply dropped to as low as 0.04 to 0.06 during late 2018 and much of 2019, reflecting tighter liquidity conditions. A recovery was observed in the first quarter of 2020 when the ratio rose to 0.29, coinciding with the peak in cash assets, but this improvement was short-lived as the ratio declined again afterward.