Lockheed Martin Corp. (NYSE:LMT)

The analysis of the quarterly liquidity ratios reveals several notable trends and fluctuations over the observed periods.

Current Ratio

The current ratio demonstrates a degree of variability throughout the timeline. Beginning at 1.23 in the first quarter of 2020, it exhibited a gradual increase, peaking at 1.42 in the fourth quarter of 2021. This peak indicates a strengthening in the ability to cover short-term liabilities with current assets during that period. Following this peak, the ratio generally declined with minor fluctuations, moving downward to 1.08 by the first quarter of 2025. This decline may suggest a weakening in liquidity or a shift in working capital management toward less liquid assets or increased liabilities.

Quick Ratio

The quick ratio, which excludes inventories from current assets, shows a pattern similar to the current ratio but with slightly less pronounced peaks. It started at 0.96 in early 2020 and rose steadily to reach its highest value of 1.18 in the third quarter of 2021. After this maximum, the ratio fluctuated but maintained a general downward trend to 0.87 by the beginning of 2025. The decline below 1.0 toward the end indicates that the company's most liquid assets without inventory are becoming less sufficient to meet short-term liabilities, which could point to liquidity management concerns.

Cash Ratio

The cash ratio, the most conservative liquidity measure focusing solely on cash and cash equivalents, exhibits significant volatility over the periods. It starts relatively low at 0.13 in the first quarter of 2020, increases to a local peak of 0.26 in the last quarter of 2021, and subsequently declines again to reach an even lower point of 0.09 by the first quarter of 2025. The fluctuations suggest periods of cash accumulation followed by drawdowns, possibly due to investment activities, debt repayment, or operational cash flow variability. The low ratio in recent periods might raise concerns about immediate liquidity buffers.

Overall, the liquidity ratios indicate that while the company had relatively strong short-term liquidity positions peaking in late 2021, there is a discernible downtrend in these ratios toward 2025. This trend suggests a potential tightening in liquidity or changes in asset and liability management strategies, which could warrant further investigation to understand the underlying operational or financial policies affecting these measures.

The analysis of the quarterly financial data reveals several trends related to current assets, current liabilities, and the current ratio over the reported periods.

Current Assets

Current assets exhibited a general upward trend from the beginning to the middle of the observed time frame, increasing from 19,222 million USD in March 2020 to a peak of 24,087 million USD in June 2023. After reaching this peak, current assets showed some volatility but generally decreased towards the end of the period, closing at 22,801 million USD in March 2025. The intermediate fluctuations suggest periods of asset reallocation or changes in liquidity management.

Current Liabilities

Current liabilities fluctuated more noticeably over the periods analyzed. Initially, there was a decline from 15,652 million USD in March 2020 to a low of 13,933 million USD in December 2020. Subsequently, liabilities increased steadily, surpassing previous levels and reaching a high of 21,187 million USD by March 2025. This rising trend in current liabilities could indicate increased short-term obligations or operational costs.

Current Ratio

The current ratio, an indicator of short-term liquidity, showed an overall declining trend after an initial increase. Starting at 1.23 in March 2020, the ratio increased to a high of 1.42 in December 2021, suggesting enhanced liquidity during that period. However, from early 2022 onward, the current ratio steadily decreased to 1.08 by March 2025. The decline in the ratio, despite relatively stable current asset levels in later periods, appears driven by the faster growth in current liabilities. This downward trend suggests a decreasing cushion to cover short-term obligations.

Overall, the financial data reflects a company experiencing growth in both assets and liabilities over time, with a gradually weakening liquidity position as evidenced by the declining current ratio from late 2021 through early 2025. The trends underline the importance of closely monitoring short-term financial health and managing liabilities relative to assets to maintain operational flexibility.

The financial data reveals fluctuating trends in the company's liquidity position over the reported periods. Total quick assets exhibit a general upward movement from March 2020 through June 2023, peaking notably during the second quarter of 2023 at 20,108 million US dollars. However, subsequent quarters show a decline, with the value tapering off to 18,504 million US dollars by March 2025.

Current liabilities have also increased overall but with more pronounced volatility. Starting at 15,652 million US dollars in March 2020, liabilities rise steadily, reaching a high of 21,187 million US dollars by March 2025. The increase in liabilities, particularly in the later periods, outpaces the growth of quick assets, indicating increased short-term obligations.

The quick ratio, representing the ability to cover current liabilities with quick assets, reflects these dynamics. Initially, the ratio maintains levels around or slightly above 1.0, indicating sound liquidity. This ratio peaked at 1.18 in September 2021, suggesting a strong liquidity position. Nevertheless, after fluctuating above 1.0 in several quarters, a decline is evident starting from December 2023 onward, falling below 1.0 in March 2024 and further down to 0.87 by March 2025. This downward trend signals a reduced buffer of liquid assets against current liabilities, potentially indicating increased short-term liquidity risk in the most recent periods.

Overall, while the company showed a generally stable and somewhat improving liquidity profile through early 2023, recent data point to a weakening quick ratio primarily driven by faster growth in current liabilities relative to quick assets. Continuous monitoring of this trend would be advisable to manage short-term financial obligations effectively.

Total Cash Assets

The total cash assets exhibited notable fluctuations over the analyzed quarters. Starting from 1,988 million USD in March 2020, there was a general upward trend reaching a peak of 3,673 million USD in June 2023. This increase was followed by a significant decline to 1,442 million USD by December 2023. Subsequently, cash assets showed a moderate recovery, fluctuating between approximately 1,800 million USD and 3,150 million USD in the subsequent quarters, ending at 1,803 million USD in March 2025. This pattern suggests periods of cash accumulation followed by substantial cash usage or outflows, indicating variability in liquidity management or operational needs throughout the timeframe.

Current Liabilities

Current liabilities demonstrated a generally increasing trend over the periods, starting at 15,652 million USD in March 2020 and rising to 21,187 million USD by March 2025. While there were minor fluctuations, such as a decrease around the end of 2020 and early 2021, the overall trajectory points towards a growth in short-term obligations. The rising liabilities may indicate expanded operational activities or increased short-term financing requirements over time.

Cash Ratio

The cash ratio, measuring liquidity by comparing cash assets to current liabilities, showed significant variability with low absolute values throughout the timeline. Initial ratios were low at 0.13 in March 2020, rising to a peak of 0.26 in December 2021, reflecting relatively higher liquidity at that point. Following this peak, the ratio declined again, reaching lows of 0.09 in December 2023 and March 2025. The generally low ratios imply that cash and cash equivalents cover only a small fraction of current liabilities, suggesting a reliance on other current assets or financing methods to meet short-term obligations. The fluctuations correspond with the movements in cash assets and liabilities, indicating dynamic liquidity conditions.