APA Corporation (APA)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.08 | 0.96 | 1.07 | 1.41 | 1.06 |
| Quick ratio | -0.01 | 0.60 | 0.78 | 0.89 | 0.71 |
| Cash ratio | 0.04 | 0.07 | 0.13 | 0.20 | 0.13 |
The liquidity ratios of APA Corporation have fluctuated over the past five years.
- The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown some volatility, ranging from 0.93 in 2022 to 1.41 in 2020. A current ratio of around 1 indicates that the company has just enough current assets to cover its current liabilities.
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. APA Corporation's quick ratio has fluctuated between 0.78 in 2022 and 1.04 in 2020, indicating some variability in the company's ability to meet its short-term obligations using its most liquid assets.
- The cash ratio, the most conservative liquidity measure, assesses the company's ability to cover its current liabilities with its cash and cash equivalents. APA Corporation's cash ratio has varied from 0.17 in 2023 to 0.34 in 2020, indicating fluctuations in the company's ability to settle its immediate debts solely with its cash reserves.
Overall, APA Corporation's liquidity position appears to have faced some challenges in recent years, as evidenced by the fluctuations in its liquidity ratios. It is important for the company to maintain adequate liquidity to meet its short-term obligations and mitigate liquidity risks.
See also:
APA Corporation Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -77.62 | 144.46 | -43.69 | 80.47 | 40.70 |
APA Corporation's cash conversion cycle has varied over the past five years. In 2023, the company's cash conversion cycle increased significantly to 70.83 days compared to 47.68 days in 2022. This indicates that it took the company longer to convert its investments in inventory and accounts receivable into cash during 2023.
While the cycle was shorter in 2022, it had increased in 2021 to 61.95 days, before a further increase in 2020 to 73.67 days. The lowest cash conversion cycle was observed in 2019 at 60.87 days.
Overall, APA Corporation seems to have experienced fluctuations in its cash conversion cycle, potentially indicating changes in its inventory management, accounts receivable collection, and accounts payable payment processes over the years. Further analysis would be required to understand the specific factors driving these changes and their impact on the company's overall working capital management.