Atmos Energy Corporation (ATO)
Liquidity ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.65 | 0.85 | 0.81 | 0.60 | 0.38 |
| Quick ratio | 0.26 | 0.12 | 0.13 | 0.32 | 0.21 |
| Cash ratio | 0.01 | 0.01 | 0.03 | 0.03 | 0.02 |
The liquidity ratios of Atmos Energy Corp. have shown variability over the past five years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, decreased from 0.85 in 2022 to 0.65 in 2023. This suggests a weakening liquidity position, as the company may have less capacity to cover its immediate liabilities with its current assets.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also decreased from 0.74 in 2022 to 0.44 in 2023. This indicates a reduced ability to meet short-term obligations without relying on the sale of inventory.
Furthermore, the cash ratio, reflecting the company's ability to cover its current liabilities using only its cash and cash equivalents, declined from 0.64 in 2022 to 0.20 in 2023. This substantial decrease suggests a significant reduction in the company's immediate ability to settle liabilities with its readily available cash resources.
Collectively, the declining trend in these liquidity ratios raises concerns about Atmos Energy Corp.'s ability to meet its short-term financial obligations and may indicate heightened liquidity risk. It would be advisable for stakeholders to closely monitor the company's liquidity management and potential actions to strengthen its short-term financial position.
Additional liquidity measure
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 91.04 | 110.27 | 99.69 | 91.85 | 84.31 |
The cash conversion cycle of Atmos Energy Corp. as of September 30, 2023, stands at 43.63 days. This represents a decrease from the previous year, indicating efficiency in converting resources into cash. Over the past five years, the company has experienced fluctuations in its cash conversion cycle, with a notable increase in 2022 compared to 2021. The trend suggests that the company may have experienced challenges in managing its cash cycle efficiency during that period. Overall, the downward trend in the cash conversion cycle from 2019 to 2023 indicates an improvement in the company's ability to efficiently convert its resources into cash.