APA Corporation (APA)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	84,000	185,000	279,000	262,000	247,000
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	2,231,000	2,697,000	2,231,000	1,308,000	1,855,000
Cash ratio		0.04	0.07	0.13	0.20	0.13

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($84,000K + $—K) ÷ $2,231,000K
= 0.04

The cash ratio measures a company's ability to cover its short-term liabilities with cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of funding.

APA Corporation's cash ratio has fluctuated over the past five years, ranging from 0.17 in 2023 to 0.34 in 2020. The decreasing trend from 2020 to 2023 suggests a potential decline in the company's liquidity position. A cash ratio of 0.17 in 2023 indicates that for every dollar of current liabilities, APA Corporation has $0.17 in cash and cash equivalents available.

While a lower cash ratio could indicate a potential liquidity challenge, it is essential to consider the industry norms and the company's overall financial health before drawing conclusions. Further analysis of APA Corporation's cash management practices, operating cash flows, and working capital management may provide insights into the factors affecting its cash ratio performance.