Liquidity ratios measure the company ability to meet its short-term obligations.

Liquidity Ratios (Summary)
Current Ratio
Quick Ratio
Cash Ratio

Waste Management Inc., liquidity ratios (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017
Current ratio	0.75	0.78	0.88	1.01	1.00	1.20	0.88	1.84	1.97	1.86	1.70	0.69	0.85	0.87	0.75	0.74	0.80	0.71	0.84	0.87
Quick ratio	0.65	0.68	0.76	0.88	0.89	1.04	0.83	1.72	1.87	1.74	1.58	0.59	0.75	0.79	0.68	0.67	0.73	0.63	0.76	0.78
Cash ratio	0.03	0.03	0.04	0.14	0.16	0.25	0.46	1.02	1.13	0.98	0.79	0.02	0.02	0.03	0.01	0.02	0.01	0.01	0.01	0.01

Current Ratio: The current ratio displayed notable fluctuations over the observed quarters. Initially, values fluctuated below 1.0, ranging from 0.71 to 0.87 through 2017 and early 2018, indicating potential liquidity constraints. A significant increase occurred in the first three quarters of 2019, with the ratio peaking at 1.97 by December 2019, suggesting improved short-term solvency during this period. However, this peak was not sustained, as the ratio declined in 2020, dropping to as low as 0.88 in June, before stabilizing around the 1.0 mark by the end of 2020 and subsequently declining again through 2021 to values between 0.75 and 0.88. This pattern suggests volatility in the company’s ability to cover short-term liabilities, with a peak in liquidity late 2019 but weakening thereafter.
Quick Ratio: The quick ratio mirrored the trends seen in the current ratio, maintaining a consistent approximate 0.1 to 0.15 ratio below the current ratio throughout most periods, reflecting the exclusion of inventory from liquid assets. Starting below 1.0 in the early periods of 2017 and 2018 (ranging from 0.63 to 0.79), it surged in 2019 to a high of 1.87 by December. Subsequent quarters witnessed a decline, with the ratio dropping back below 1.0 through mid-2020 and stabilizing in the later quarters of 2020 and throughout 2021 within the range of 0.65 to 1.04. This indicates that immediate liquidity without inventory was strongest in 2019 but deteriorated after that, following a similar trajectory as the current ratio.
Cash Ratio: The cash ratio exhibited marked volatility with generally low values from 2017 through 2018, fluctuating between 0.01 and 0.03, indicating minimal cash and cash equivalents relative to current liabilities. A substantial increase occurred in 2019, reaching a peak of 1.13 at the end of the year, signifying a strong cash position relative to liabilities. This peak was short-lived; cash ratios declined sharply in 2020, falling to 0.46 in March and continuing to decrease to as low as 0.14 by December 2020. Through 2021, the ratio remained low, between 0.03 and 0.16, indicating a reduced cash buffer during this period. This trend suggests a concentration of cash assets in 2019 not maintained in subsequent years, which may impact immediate liquidity risk.

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Waste Management Inc., current ratio calculation (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017
Selected Financial Data (US$ in millions)
Current assets	3,069)	3,184)	3,226)	3,327)	3,540)	3,357)	5,106)	5,635)	6,209)	5,560)	4,836)	2,488)	2,645)	2,675)	2,471)	2,491)	2,624)	2,300)	2,326)	2,223)
Current liabilities	4,082)	4,102)	3,683)	3,285)	3,553)	2,806)	5,772)	3,070)	3,144)	2,989)	2,846)	3,612)	3,108)	3,070)	3,305)	3,373)	3,262)	3,259)	2,770)	2,558)
Liquidity Ratio
Current ratio¹	0.75	0.78	0.88	1.01	1.00	1.20	0.88	1.84	1.97	1.86	1.70	0.69	0.85	0.87	0.75	0.74	0.80	0.71	0.84	0.87

¹ Q4 2021 Calculation
Current ratio = Current assets ÷ Current liabilities
= 3,069 ÷ 4,082 = 0.75

The analysis of the quarterly financial data reveals notable fluctuations in current assets, current liabilities, and the current ratio over the observed periods.

Current Assets: Current assets displayed a general upward trend from March 2017 to December 2019, increasing from 2,223 million USD to a peak of 6,209 million USD. This was followed by a decline starting in March 2020, with values dropping to 3,327 million USD by September 2020 before stabilizing around the 3,000 million USD range through December 2021. The significant increase until late 2019 suggests strong asset accumulation or liquidity build-up, while the subsequent decline may indicate asset liquidation, operational changes, or other financial adjustments during 2020 and onwards.
Current Liabilities: Current liabilities fluctuated more erratically. Starting at 2,558 million USD in March 2017, liabilities rose to 3,612 million USD by March 2019, showing some volatility within intermediate periods. A notable spike occurred in June 2020, reaching 5,772 million USD, likely reflecting increased short-term obligations or restructuring effects. Post-peak, liabilities decreased again but showed intermittent increases, ending at 4,082 million USD by December 2021. This pattern indicates periods of increased financial obligations potentially linked to external economic factors or operational adjustments.
Current Ratio: The current ratio, indicating liquidity, showed significant variability. Initially below 1.0 from March 2017 through December 2019, fluctuating between 0.69 and 0.87, it spiked sharply in June 2019 to 1.7 and continued improving to a high of 1.97 by December 2019. This suggests improved liquidity during this period, potentially from asset increases or liability management. However, in March 2020, the ratio fell back to 1.84 and declined further through December 2021, descending below 1.0 again, reaching 0.75 by the end of the period. This indicates a deterioration in short-term liquidity, signaling possible challenges in meeting current liabilities from current assets in recent quarters.

In summary, the data shows that the company's liquidity position improved significantly towards the end of 2019 but worsened thereafter, with current assets declining and current liabilities showing volatility and spikes, especially in mid-2020. The current ratio trends suggest heightened liquidity risk in the latest periods analyzed.

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Waste Management Inc., quick ratio calculation (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017
Selected Financial Data (US$ in millions)
Cash and cash equivalents	118)	116)	148)	476)	553)	703)	2,663)	3,125)	3,561)	2,915)	2,250)	57)	61)	83)	47)	52)	22)	35)	32)	30)
Accounts receivable, net of allowance for doubtful accounts	2,278)	2,323)	2,195)	2,025)	2,097)	1,927)	1,888)	1,846)	1,949)	2,010)	2,017)	1,830)	1,931)	1,943)	1,838)	1,700)	1,805)	1,790)	1,772)	1,634)
Other receivables, net of allowance for doubtful accounts	268)	346)	450)	402)	527)	290)	219)	322)	370)	270)	243)	251)	344)	399)	351)	504)	569)	212)	305)	338)
Total quick assets	2,664)	2,785)	2,793)	2,903)	3,177)	2,920)	4,770)	5,293)	5,880)	5,195)	4,510)	2,138)	2,336)	2,425)	2,236)	2,256)	2,396)	2,037)	2,109)	2,002)

Current liabilities	4,082)	4,102)	3,683)	3,285)	3,553)	2,806)	5,772)	3,070)	3,144)	2,989)	2,846)	3,612)	3,108)	3,070)	3,305)	3,373)	3,262)	3,259)	2,770)	2,558)
Liquidity Ratio
Quick ratio¹	0.65	0.68	0.76	0.88	0.89	1.04	0.83	1.72	1.87	1.74	1.58	0.59	0.75	0.79	0.68	0.67	0.73	0.63	0.76	0.78

¹ Q4 2021 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 2,664 ÷ 4,082 = 0.65

Total Quick Assets: The total quick assets exhibit notable fluctuations throughout the reported quarters. From March 2017 to December 2017, values increased moderately from 2002 million USD to 2396 million USD. This was followed by a period of relative stability with minor fluctuations through 2018, ranging mostly between 2236 million USD and 2425 million USD. A significant upward spike is observed in the first three quarters of 2019, reaching a peak of 5880 million USD by December 2019. However, subsequent quarters show a marked decrease, dropping to 2920 million USD by September 2020, before stabilizing somewhat around the 2700-3200 million USD range through the end of 2021.
Current Liabilities: Current liabilities display a generally increasing trend from 2558 million USD in March 2017 to a peak of 5772 million USD in June 2020. Notable surges are evident in the second quarter of 2020, possibly indicating the acquisition of liabilities or increased short-term obligations. Prior to this peak, liabilities generally fluctuated between approximately 2558 million USD and 3612 million USD. Following June 2020, liabilities decline moderately and then escalate again towards the end of 2021, reaching 4082 million USD in the last quarter.
Quick Ratio: The quick ratio values present considerable variability. Initially, the ratio hovers below 1.0 from 0.78 in March 2017 down to a low of 0.59 by March 2019, indicating that quick assets were insufficient to fully cover current liabilities during this period. During 2019, the quick ratio dramatically improves, peaking at 1.87 in December 2019, reflecting very strong short-term liquidity. However, this improvement is not sustained; by June 2020, the ratio declines sharply to 0.83 and fluctuates just below or slightly above 1.0 in the following quarters, mostly remaining on a downward trend, ending at 0.65 in December 2021. This suggests a weakening liquidity position towards the end of the observed period.
Overall Analysis: The company’s short-term liquidity demonstrated strength during late 2019, marked by increased quick assets and a high quick ratio, allowing comfortable coverage of current liabilities. This period possibly reflects optimized cash management or asset liquidation. Nonetheless, the sharp increase in current liabilities during mid-2020 and the concurrent decrease in quick assets led to a deterioration of the quick ratio substantially below 1.0, indicating tighter liquidity conditions. The subsequent quarters through 2021 show modest recovery efforts but generally maintain a conservative liquidity cushion with the quick ratio stabilizing below optimal levels. This trend may warrant monitoring and strategic attention to strengthen liquidity and manage liabilities effectively.

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Waste Management Inc., cash ratio calculation (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017
Selected Financial Data (US$ in millions)
Cash and cash equivalents	118)	116)	148)	476)	553)	703)	2,663)	3,125)	3,561)	2,915)	2,250)	57)	61)	83)	47)	52)	22)	35)	32)	30)
Total cash assets	118)	116)	148)	476)	553)	703)	2,663)	3,125)	3,561)	2,915)	2,250)	57)	61)	83)	47)	52)	22)	35)	32)	30)

Current liabilities	4,082)	4,102)	3,683)	3,285)	3,553)	2,806)	5,772)	3,070)	3,144)	2,989)	2,846)	3,612)	3,108)	3,070)	3,305)	3,373)	3,262)	3,259)	2,770)	2,558)
Liquidity Ratio
Cash ratio¹	0.03	0.03	0.04	0.14	0.16	0.25	0.46	1.02	1.13	0.98	0.79	0.02	0.02	0.03	0.01	0.02	0.01	0.01	0.01	0.01

¹ Q4 2021 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 118 ÷ 4,082 = 0.03

Total Cash Assets: The total cash assets experienced moderate fluctuations from March 2017 through December 2018, generally ranging between $22 million and $83 million. A significant and abrupt increase occurred starting in March 2019, with cash assets rising sharply to $2,250 million and continuing to grow to a peak of $3,561 million by December 2019. Following this peak, there was a noticeable decline throughout 2020, bringing cash assets down to a low of $476 million by December 2020. In 2021, cash levels further decreased to under $150 million, ending the year with values close to $116-$118 million.
Current Liabilities: Current liabilities showed steady growth from March 2017, beginning at $2,558 million and increasing incrementally to around $3,600 million by March 2019. A sharp spike occurred in June 2020, where liabilities surged to $5,772 million, more than doubling the previous quarter's value. After this peak, liabilities decreased somewhat in the latter part of 2020 and fluctuated between roughly $3,200 million and $4,100 million through 2021, showing elevated but stabilized levels above the earlier periods.
Cash Ratio: The cash ratio was consistently low and below 0.05 from 2017 through early 2019, indicating limited liquidity relative to current liabilities. With the surge in cash assets in early 2019, the cash ratio improved drastically to 0.79 and climbed above 1.0 reaching 1.13 by the end of 2019, suggesting strong liquidity coverage of current liabilities during this period. However, from 2020 onwards, the cash ratio declined sharply, falling to 0.16 by September 2020 and further decreasing to approximately 0.03 by the end of 2021, indicating a notable deterioration in liquidity relative to current obligations.
Overall Trends and Insights: The data reveals a period of volatile liquidity and liability management. The substantial increase in cash assets in 2019 coupled with a corresponding rise in the cash ratio points towards a temporary but robust liquidity position during that year. This may reflect changes in cash management or capital raising activities. The concurrent peak in current liabilities during mid-2020 reflects increased short-term obligations, possibly linked to external events affecting operational or financial strategies. The subsequent decline in cash assets and cash ratio through 2020 and 2021 indicates a tightening liquidity situation, with current liabilities remaining elevated. This pattern suggests increased pressure on short-term financial flexibility and potential challenges in managing working capital towards the end of the analyzed period.

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Waste Management Inc. (NYSE:WM)

Analysis of Liquidity Ratios
Quarterly Data

Liquidity Ratios (Summary)

Current Ratio

Quick Ratio

Cash Ratio

Waste Management Inc. (NYSE:WM)

Analysis of Liquidity Ratios Quarterly Data

Liquidity Ratios (Summary)

Current Ratio

Quick Ratio

Cash Ratio

Analysis of Liquidity Ratios
Quarterly Data