APA Corporation (APA)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.15 | 1.02 | 0.93 | 1.12 | 1.41 |
| Quick ratio | 0.21 | 0.04 | 0.08 | 0.14 | 0.20 |
| Cash ratio | 0.21 | 0.04 | 0.08 | 0.14 | 0.20 |
Based on the liquidity ratios of APA Corporation, we can observe the following trends:
1. Current Ratio: The current ratio of APA Corporation has fluctuated over the years, starting at 1.41 in 2020 and declining to 0.93 in 2022, before recovering to 1.02 in 2023 and further increasing to 1.15 in 2024. Although the ratio dipped below 1 in 2022, indicating a potential short-term liquidity issue, the subsequent improvement suggests a strengthening liquidity position.
2. Quick Ratio: The quick ratio of APA Corporation has shown a similar downward trend over the years, from 0.20 in 2020 to 0.04 in 2023, before rebounding to 0.21 in 2024. The sharp decline in 2022 and 2023 indicates a decreasing ability to meet short-term obligations with quickly liquidated assets, but the recovery in 2024 implies an improved capacity to cover immediate liabilities.
3. Cash Ratio: The cash ratio of APA Corporation closely resembles the quick ratio trend, with a decrease from 0.20 in 2020 to 0.04 in 2023, followed by an increase to 0.21 in 2024. This suggests that the company's cash reserves relative to current liabilities were strained in the middle years but have since strengthened.
Overall, the fluctuations in liquidity ratios indicate varying levels of short-term solvency and ability to meet immediate financial obligations. While the ratios dipped below ideal thresholds in certain years, the recent improvements suggest a more stable liquidity position for APA Corporation.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 28.54 | 40.81 | 32.34 | 38.84 | 50.87 |
The cash conversion cycle of APA Corporation has shown fluctuations over the past five years.
In December 2020, the company's cash conversion cycle was 50.87 days, indicating that it took over a month for APA Corporation to turn its investments in raw materials into cash received from sales.
By December 2022, the cash conversion cycle had improved to 32.34 days, showing that the company had become more efficient in converting its investments into cash.
In December 2024, APA Corporation further reduced its cash conversion cycle to 28.54 days, suggesting that the company was managing its working capital more effectively and turning its inventory into cash more quickly.
Despite a slight increase in the cash conversion cycle in December 2023 compared to the previous year, the overall trend indicates that APA Corporation has been successful in optimizing its working capital management and improving the efficiency of its cash flow cycle over the period analyzed.