Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
Time Warner Inc., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31).
- Current ratio
- The current ratio demonstrates variability over the observed periods, starting at 1.69 in the first quarter of 2014 and peaking at 1.97 in the second quarter of the same year. Subsequently, it trends downward to 1.08 by the end of the first quarter of 2018, reflecting a gradual decline in short-term liquidity. A notable decrease appears in the final quarters of the dataset, suggesting diminished ability to cover current liabilities with current assets.
- Quick ratio
- The quick ratio, which excludes inventories from current assets, follows a similar pattern to the current ratio. It reaches a high of 1.59 in mid-2014 before generally declining to a low of 0.85 in late 2017. This drop indicates a reduced capacity to meet short-term obligations with more liquid assets, possibly signaling increased reliance on inventories or less liquid current assets over time. The ratio shows slight recovery to 0.92 by early 2018 but remains below earlier levels.
- Cash ratio
- The cash ratio exhibits relatively lower values throughout the periods compared to the current and quick ratios, reflecting the most conservative measure of liquidity. It begins at 0.43 in early 2014, decreases to a low of 0.13 in the first quarter of 2018, with intermittent fluctuations. The overall downward trend indicates a declining level of cash and cash equivalents relative to current liabilities, which may imply increased cash usage or accumulation of liabilities not matched by equivalent cash reserves.
Current Ratio
Time Warner Inc., current ratio calculation (quarterly data)
| Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Current ratio1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||
| Alphabet Inc. | |||||||||||||||||||||||
| Comcast Corp. | |||||||||||||||||||||||
| Meta Platforms Inc. | |||||||||||||||||||||||
| Netflix Inc. | |||||||||||||||||||||||
| Trade Desk Inc. | |||||||||||||||||||||||
| Walt Disney Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31).
1 Q1 2018 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets displayed fluctuations over the analyzed quarters. Starting at approximately 13,994 million USD at the beginning of 2014, the level showed some declines and rebounds within the same year. A low point occurred around the first quarter of 2016 with values near 11,792 million USD. Subsequently, there was an upward trend throughout 2017 and early 2018, reaching a peak of approximately 15,219 million USD in the last quarter of 2017 before slightly decreasing to 15,138 million USD in the first quarter of 2018. Overall, the data suggests moderate volatility with a general trend towards growth in current assets by the end of the period.
- Current Liabilities
- Current liabilities presented significant variability during the observed timeframe. From 8,278 million USD at the start of 2014, liabilities initially declined, reaching a low of approximately 6,972 million USD mid-2016. However, a notable increase occurred in the fourth quarter of 2017, where liabilities surged sharply to 14,077 million USD and remained elevated at 12,945 million USD in the first quarter of 2018. This sharp rise indicates potential increased short-term obligations or changes in the company's financing or operational activities toward the end of the period.
- Current Ratio
- The current ratio, indicative of short-term liquidity, exhibited a generally decreasing trend over the multi-year span. Initially, the ratio was relatively strong at 1.69 to 1.97 during early 2014, signifying good coverage of current liabilities by current assets. Thereafter, the ratio fluctuated but mostly declined, reaching its lowest points in late 2017 and early 2018, near 1.08 and 1.17 respectively. Despite occasional rebounds, the overall trend points to tightened liquidity, potentially due to the substantial increase in current liabilities outpacing the growth in current assets during the later quarters.
Quick Ratio
Time Warner Inc., quick ratio calculation (quarterly data)
| Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Cash and equivalents | |||||||||||||||||||||||
| Receivables, less allowances | |||||||||||||||||||||||
| Total quick assets | |||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Quick ratio1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||
| Alphabet Inc. | |||||||||||||||||||||||
| Comcast Corp. | |||||||||||||||||||||||
| Meta Platforms Inc. | |||||||||||||||||||||||
| Netflix Inc. | |||||||||||||||||||||||
| Trade Desk Inc. | |||||||||||||||||||||||
| Walt Disney Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31).
1 Q1 2018 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Quick Assets Trend
- The total quick assets showed a fluctuating pattern over the periods analyzed. Initially, the values were relatively stable, mostly hovering around the 10,000 US$ million mark. There was a noticeable dip in quick assets during the middle of 2015, falling below 9,100 US$ million in September 2015, followed by a gradual recovery. The period from early 2017 to early 2018 saw a notable increase, peaking at 12,022 US$ million in December 2017 before slightly decreasing to 11,970 US$ million by March 2018.
- Current Liabilities Trend
- Current liabilities exhibited more pronounced variations across the quarters. Starting from 8,278 US$ million in March 2014, there was a decline and then fluctuation through mid-2015. A significant surge occurred in the last quarters leading up to March 2018, with current liabilities reaching a high of 14,077 US$ million in December 2017 before slightly reducing to 12,945 US$ million by March 2018. This sharp increase in liabilities towards the end of the period is a noteworthy development.
- Quick Ratio Analysis
- The quick ratio, which measures short-term liquidity, mirrored the trends in quick assets and current liabilities. It started relatively strong, reaching highs around 1.59 in mid-2014. There was a decline throughout 2014 and mid-2015, dropping close to 1.08. This was followed by a recovery phase through 2016, with the ratio moving back above 1.3 at times. However, towards the end of 2017 and into early 2018, the quick ratio fell sharply to below 1.0, reaching 0.85 in December 2017 and 0.92 in March 2018, indicating reduced liquidity and a tighter short-term financial position.
- Summary and Insights
- Overall, the data indicates a period of moderate liquidity stability followed by increased volatility. The notable rise in current liabilities in late 2017, combined with a less pronounced increase in quick assets, led to a decline in the quick ratio below 1.0, implying potential liquidity pressure. The firm’s ability to cover short-term obligations from its liquid assets weakened in this timeframe. The trends suggest close monitoring of working capital management and liquidity risk is advisable going forward.
Cash Ratio
Time Warner Inc., cash ratio calculation (quarterly data)
| Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Cash and equivalents | |||||||||||||||||||||||
| Total cash assets | |||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Cash ratio1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||
| Alphabet Inc. | |||||||||||||||||||||||
| Comcast Corp. | |||||||||||||||||||||||
| Meta Platforms Inc. | |||||||||||||||||||||||
| Netflix Inc. | |||||||||||||||||||||||
| Trade Desk Inc. | |||||||||||||||||||||||
| Walt Disney Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31).
1 Q1 2018 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibit a fluctuating trend over the periods analyzed. Initially, cash assets rose from 3,546 million USD in March 2014 to a peak of 4,480 million USD in June 2014, followed by a significant decline reaching a low of 1,539 million USD by December 2016. Subsequently, there was a moderate recovery to 2,621 million USD in December 2017 before dropping again to 1,691 million USD by March 2018. Overall, cash assets show volatility with no sustained upward or downward trend over the entire timeframe.
- Current Liabilities
- Current liabilities demonstrate considerable variability but generally remain elevated throughout the periods. Starting at 8,278 million USD in March 2014, liabilities fluctuate with some quarters showing reductions (e.g., 6,972 million USD in June 2016) but with sharp increases notably in December 2017, reaching 14,077 million USD. By March 2018, current liabilities remain significantly high at 12,945 million USD. These figures suggest increasing short-term obligations, particularly towards the later periods.
- Cash Ratio
- The cash ratio shows a declining tendency across the examined quarters, starting at a moderate level of 0.43 in March 2014 and dropping to a low of 0.13 by March 2018. This ratio measures liquidity by comparing cash assets to current liabilities. The steady decrease implies that cash on hand relative to liabilities has diminished substantially, indicating potential liquidity pressure. Temporary minor recoveries occur but do not alter the overall downward trend.