The AES Corporation (AES)
Current ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 6,831,000 | 6,649,000 | 7,643,000 | 5,356,000 | 5,414,000 |
| Total current liabilities | US$ in thousands | 8,571,000 | 9,731,000 | 6,491,000 | 4,732,000 | 5,362,000 |
| Current ratio | 0.80 | 0.68 | 1.18 | 1.13 | 1.01 |
December 31, 2024 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $6,831,000K ÷ $8,571,000K
= 0.80
The AES Corporation's current ratio has shown some fluctuations over the past five years. As of December 31, 2020, the current ratio was 1.01, indicating that the company had just enough current assets to cover its current liabilities. Subsequently, the ratio increased to 1.13 by December 31, 2021, and further improved to 1.18 by December 31, 2022, suggesting improved liquidity and a stronger ability to meet short-term obligations.
However, there was a significant decline in the current ratio to 0.68 by December 31, 2023, which may raise concerns about the company's liquidity position and its ability to meet its short-term liabilities comfortably. The ratio slightly improved to 0.80 by December 31, 2024, but it still remains below 1, indicating potential liquidity challenges.
Overall, the trend in The AES Corporation's current ratio shows some volatility, with periods of improvement followed by a notable decrease. It is essential for the company to closely monitor its liquidity position and work towards maintaining a healthy current ratio to ensure its ability to meet short-term obligations efficiently.