APA Corporation (APA)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.08 | 1.09 | 1.00 | 1.16 | 0.96 | 1.22 | 1.01 | 1.19 | 1.07 | 1.06 | 1.51 | 1.52 | 1.41 | 1.24 | 0.97 | 0.94 | 1.06 | 1.03 | 1.23 | 1.05 |
| Quick ratio | -0.01 | -0.00 | 0.56 | 0.69 | 0.60 | 0.88 | 0.73 | 0.87 | 0.78 | 0.77 | 1.17 | 1.00 | 0.89 | 0.77 | 0.59 | 0.63 | 0.71 | 0.64 | 0.73 | 0.64 |
| Cash ratio | 0.04 | 0.04 | 0.05 | 0.05 | 0.07 | 0.07 | 0.08 | 0.07 | 0.13 | 0.17 | 0.57 | 0.21 | 0.20 | 0.12 | 0.08 | 0.21 | 0.13 | 0.08 | 0.24 | 0.14 |
APA Corporation's liquidity ratios provide insight into its ability to meet short-term financial obligations.
1. Current Ratio: The current ratio has fluctuated over the past eight quarters, ranging from 0.93 to 1.11. A current ratio below 1 indicates potential liquidity issues as current liabilities exceed current assets. While the current ratio has been hovering around 1, it suggests that APA Corporation may have a relatively tight liquidity position.
2. Quick Ratio: The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity. APA Corporation's quick ratio has also shown variability, ranging from 0.78 to 0.91. A quick ratio below 1 indicates that the company may have difficulty meeting its short-term obligations without relying on inventory sales.
3. Cash Ratio: The cash ratio, the most stringent liquidity measure, assesses the ability to cover current liabilities with cash and cash equivalents only. APA Corporation's cash ratio has ranged from 0.17 to 0.30 over the past eight quarters. A cash ratio below 1 indicates that the company may not have sufficient liquid assets to cover its short-term obligations solely with cash on hand.
Overall, APA Corporation's liquidity ratios suggest that while the company has been able to meet its short-term obligations, there are fluctuations that indicate a potential need to closely monitor and manage liquidity going forward to ensure financial stability.
See also:
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -71.81 | -119.22 | 361.09 | -3.17 | -83.57 | -123.30 | -168.63 | -10.68 | -69.56 | -76.22 | -25.68 | 106.58 | 80.45 | 76.94 | 64.61 | 46.64 | 29.99 | 16.29 | 13.28 | -5.20 |
APA Corporation's cash conversion cycle has been fluctuating over the past eight quarters, ranging from a low of 47.68 days in Q4 2022 to a high of 73.28 days in Q3 2023. The trend indicates some volatility in the company's ability to convert its resources into cash efficiently.
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales. A shorter cash conversion cycle is generally seen as more favorable, as it indicates that the company is able to efficiently manage its working capital.
In the case of APA Corporation, the average cash conversion cycle over the eight quarters analyzed is approximately 61.74 days. This suggests that, on average, the company takes about two months to convert its investments into cash flow from sales.
It is important for APA Corporation to monitor and manage its cash conversion cycle effectively to ensure optimal working capital management. By identifying opportunities to streamline inventory management, accounts receivable, and accounts payable processes, the company can potentially reduce its cash conversion cycle and improve its overall financial efficiency.