Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
---|---|---|---|---|---|---|
Current ratio | ||||||
Quick ratio | ||||||
Cash ratio |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
- Current Ratio
-
The current ratio showed a slight increase from 0.87 in 2016 to 0.89 in 2017, indicating a marginal improvement in short-term liquidity. However, this was followed by a descending trend, reaching 0.73 in 2019, reflecting a reduction in the company's ability to cover its current liabilities with its current assets. A modest recovery occurred in 2020, with the ratio rising to 0.8, although this remained below the initial 2016 level.
- Quick Ratio
-
The quick ratio exhibited a declining pattern over the period. Starting at 0.53 in 2016, it decreased to 0.5 in 2017 and continued to fall more sharply through subsequent years, ending at 0.39 in both 2019 and 2020. This decline suggests a diminishing capacity to meet short-term obligations with the most liquid assets.
- Cash Ratio
-
The cash ratio demonstrated a consistent downward trend over the analyzed years. Beginning at 0.16 in 2016, it declined progressively each year, reaching 0.05 by 2020. This indicates a continuous reduction in the proportion of cash and cash equivalents relative to current liabilities, highlighting progressively tighter immediate liquidity.
- Overall Liquidity Trends
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The liquidity ratios collectively point to a weakening in the company's short-term financial health from 2016 to 2020. Despite a slight recovery in the current ratio at the end of the period, both quick and cash ratios consistently declined, suggesting a decreased capacity to quickly settle liabilities without relying on the sale of inventory or other less liquid assets.
Current Ratio
Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Current assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Current ratio1 | ||||||
Benchmarks | ||||||
Current Ratio, Competitors2 | ||||||
Procter & Gamble Co. | ||||||
Current Ratio, Industry | ||||||
Consumer Staples |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets exhibited slight fluctuations over the five-year period. Starting at 5,115 million USD in 2016, they increased modestly in 2017 to 5,211 million USD, followed by a decline in 2018 to 5,041 million USD. The asset value remained relatively stable in 2019 at 5,057 million USD, with a moderate increase to 5,174 million USD in 2020. Overall, the current assets showed limited growth with some year-to-year variability.
- Current Liabilities
- Current liabilities demonstrated an upward trend from 2016 to 2019, rising from 5,846 million USD to a peak of 6,919 million USD. In 2020, there was a notable decrease to 6,443 million USD. Despite the dip in the final year, the level of current liabilities remains elevated compared to the initial year, indicating increasing short-term obligations over the majority of the period.
- Current Ratio
- The current ratio, indicative of short-term liquidity, declined consistently from 0.87 in 2016 to its lowest point of 0.73 in 2019. This decline reflects a tightening liquidity position, largely driven by the rising current liabilities and relatively stable or declining current assets. In 2020, the ratio improved slightly to 0.80, suggesting a modest recovery in liquidity but still below the levels seen in the earlier years.
Quick Ratio
Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Accounts receivable, net | ||||||
Total quick assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Quick ratio1 | ||||||
Benchmarks | ||||||
Quick Ratio, Competitors2 | ||||||
Procter & Gamble Co. | ||||||
Quick Ratio, Industry | ||||||
Consumer Staples |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibited a declining trend over the five-year period. Starting from US$ 3,099 million in 2016, the value continuously decreased each year, reaching US$ 2,538 million by the end of 2020. This consistent reduction indicates diminishing liquid assets excluding inventory and other current assets over the timeframe.
- Current Liabilities
- Current liabilities displayed a generally increasing pattern from 2016 to 2019, rising from US$ 5,846 million to US$ 6,919 million. However, in 2020, there was a noticeable decline to US$ 6,443 million. Despite the slight drop in the final year, current liabilities remain substantially higher than the level recorded at the beginning of the period.
- Quick Ratio
- The quick ratio steadily declined throughout the period, moving from 0.53 in 2016 to 0.39 in both 2019 and 2020. This downward trend reflects a decreasing ability to cover current liabilities with the most liquid assets. The decline in the quick ratio coincides with the reduction in quick assets and the overall increase in current liabilities, suggesting increased liquidity risk over the period.
Cash Ratio
Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Total cash assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Cash ratio1 | ||||||
Benchmarks | ||||||
Cash Ratio, Competitors2 | ||||||
Procter & Gamble Co. | ||||||
Cash Ratio, Industry | ||||||
Consumer Staples |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets showed a consistent declining trend over the five-year period. Starting at US$923 million in 2016, cash assets decreased each subsequent year, dropping to US$303 million by the end of 2020. This represents a considerable reduction of approximately 67% over the period.
- Current liabilities
- Current liabilities generally increased from 2016 through 2019, rising from US$5,846 million to US$6,919 million. In 2020, a decline occurred, with current liabilities falling to US$6,443 million. Despite this recent decrease, the overall trend over the five years indicates growth in current liabilities, reflecting potentially higher short-term financial obligations.
- Cash ratio
- The cash ratio steadily declined from 0.16 in 2016 to 0.05 in 2020. This decreasing ratio signifies a diminishing ability to cover current liabilities using only cash and cash equivalents. The continual drop aligns with the reduction in total cash assets and the increase in current liabilities observed during the same timeframe.