The AES Corporation (AES)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 6,649,000 | 7,643,000 | 5,356,000 | 5,414,000 | 5,231,000 |
| Total current liabilities | US$ in thousands | 9,731,000 | 6,491,000 | 4,732,000 | 5,362,000 | 5,096,000 |
| Current ratio | 0.68 | 1.18 | 1.13 | 1.01 | 1.03 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $6,649,000K ÷ $9,731,000K
= 0.68
The current ratio of AES Corp, a measure of the company's ability to meet its short-term liabilities with its current assets, has shown a declining trend over the past five years. The ratio has decreased from 1.03 in 2019 to 0.68 in 2023. This indicates that the company may have difficulties in meeting its short-term obligations using its current assets alone.
The current ratio dipped below 1 in 2020 and 2023, which suggests that AES Corp had more short-term liabilities than current assets during those years. This may imply potential liquidity challenges for the company. While a current ratio below 1 is not necessarily a cause for alarm, it does warrant further investigation into the company's liquidity management and potential risks to its financial stability.
It is important for investors and stakeholders to monitor AES Corp's current ratio closely and assess the company's liquidity position in relation to its short-term obligations. Additional financial analysis and context would be needed to fully understand the implications of the fluctuating current ratio on the company's financial health and performance.