Time Warner Cable Inc. (NYSE:TWC)

Current Ratio

The current ratio exhibited a downward trend from 1.19 in 2011 to a low of 0.41 in 2013, indicating a decrease in the company's ability to cover short-term liabilities with current assets. Although there was a slight recovery in subsequent years, reaching 0.62 in 2015, the ratio remained below 1.0 for the later periods, suggesting ongoing liquidity pressures.

Quick Ratio

The quick ratio followed a pattern similar to the current ratio, decreasing steadily from 1.11 in 2011 to 0.28 in 2013, highlighting a significant reduction in liquid assets relative to current liabilities. Partial improvement occurred thereafter, with the ratio increasing to 0.53 by 2015; however, this level still implies limited immediate liquidity without relying on inventory.

Cash Ratio

The cash ratio showed the most pronounced decline, dropping sharply from 0.96 in 2011 to 0.10 in 2013. This decline indicates a significant contraction in cash and cash equivalents relative to current liabilities. Despite some recovery to 0.30 in 2015, the ratio remained considerably below the starting point, reflecting constrained cash reserves over the period.

Current Assets

Current assets experienced a significant decline from 2011 to 2013, dropping from $6,398 million to $2,144 million. Following this marked decrease, the value of current assets stabilized and showed a slight upward trend in 2014 and 2015, increasing to $2,316 million and then to $2,459 million.

Current Liabilities

Current liabilities remained relatively stable between 2011 and 2013, with minor fluctuations around the $5,200 million range. From 2013 onwards, there was a consistent downward trend, decreasing to $4,497 million in 2014 and further to $3,949 million in 2015.

Current Ratio

The current ratio displayed a deteriorating trend from 2011 to 2013, falling significantly from 1.19 to 0.41, indicating reduced short-term liquidity. Although the current ratio remained below 1 throughout the period, it showed signs of improvement after 2013, rising to 0.52 in 2014 and 0.62 in 2015; however, these levels still suggest potential liquidity constraints.

The analysis of the provided financial data reveals significant fluctuations in the company's liquidity position between 2011 and 2015. The quick ratio, which measures the ability to cover current liabilities with quick assets, shows a clear downward trend from 1.11 in 2011 to a low of 0.28 in 2013, indicating a reduction in short-term liquidity. Although there is a slight recovery thereafter, reaching 0.53 in 2015, the ratio remains notably below the initial level and below the generally accepted benchmark of 1.0 for healthy liquidity.

Examining the components of the quick ratio, total quick assets exhibit a pronounced decline from 5944 million US dollars in 2011 to only 1479 million in 2013. Following this trough, there is a modest increase to 2086 million by the end of 2015. This decline and partial recovery in quick assets explain the corresponding behavior of the quick ratio.

In contrast, current liabilities show a gradual decrease over the same period, from 5370 million in 2011 to 3949 million in 2015. The reduction in liabilities would typically support an improvement in liquidity ratios; however, the decline in quick assets has a dominating effect, causing the quick ratio to fall below optimal levels despite the lower liabilities.

Quick Ratio Trend

Declined sharply from 1.11 in 2011 to 0.28 in 2013, followed by a partial recovery to 0.53 in 2015, indicating weakening liquidity over the period.

Total Quick Assets Pattern

Decreased significantly from 5944 million in 2011 to a low of 1479 million in 2013, then rose moderately to 2086 million by 2015, mirroring the movement of the quick ratio.

Current Liabilities Movement

Decreased steadily from 5370 million in 2011 to 3949 million in 2015, contributing positively to liquidity but insufficient to offset asset declines.

In summary, the company's liquidity position weakened considerably between 2011 and 2013 due mainly to a sharp contraction in quick assets. Though current liabilities decreased steadily, the improvement was not sufficient to restore the quick ratio to previous levels. A modest recovery in quick assets and the quick ratio occurred after 2013, but liquidity remained below optimal benchmarks by the end of 2015. This suggests a need for continued focus on enhancing short-term asset management to improve financial stability.

Total cash assets

The total cash assets exhibited a downward trend from 2011 to 2013, dropping sharply from 5,177 million US dollars to a low of 525 million US dollars in 2013. Subsequently, a gradual recovery is evident over the next two years, with cash assets increasing to 707 million US dollars in 2014 and further to 1,170 million US dollars in 2015. Despite the increase after 2013, cash assets remained significantly lower in 2015 compared to the level at the beginning of the period.

Current liabilities

Current liabilities show a consistent decline from 5,370 million US dollars in 2011 to 3,949 million US dollars in 2015. This steady decrease suggests a reduction in short-term obligations over the five-year span, with the most notable reductions occurring between 2012 and 2015.

Cash ratio

The cash ratio experienced a marked decrease from 0.96 in 2011 to 0.10 in 2013, indicating a significant drop in liquidity relative to current liabilities. After 2013, the ratio improved, rising to 0.16 in 2014 and then to 0.30 in 2015. Although this improvement reflects a positive trend in liquidity, the ratio in 2015 remains well below the initial level in 2011, suggesting that cash available to cover current liabilities is still relatively low.

Summary of financial trends

Overall, the company experienced a notable decline in cash assets and liquidity in the early part of the period, reaching minimum levels in 2013. From 2013 onwards, there was a gradual recovery in cash reserves and liquidity ratios. Concurrently, current liabilities were consistently reduced throughout the period, which partially offsets the impact of reduced cash assets on liquidity ratios. Despite these positive signs in later years, the liquidity position as measured by the cash ratio at the end of 2015 remains substantially lower than at the beginning of the observed period.