CenterPoint Energy Inc (CNP)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.08 1.11 1.20 1.25 0.78 0.78 0.88 1.00 0.92 0.89 1.03 0.91 1.72 1.71 1.54 0.74 0.61 0.73 0.58 1.03
Quick ratio 0.14 0.17 0.16 0.19 0.16 0.18 0.23 0.21 0.11 0.12 0.28 0.18 0.39 0.23 0.31 0.23 0.21 0.27 0.21 0.22
Cash ratio 0.14 0.17 0.16 0.19 0.16 0.18 0.23 0.21 0.11 0.12 0.28 0.18 0.39 0.23 0.31 0.23 0.21 0.27 0.21 0.22

CenterPoint Energy Inc's liquidity ratios have shown some fluctuations over the quarters.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown some volatility but has generally improved over the quarters. The current ratio improved significantly from June 2021 to December 2021, indicating that the company had more current assets to cover its short-term obligations. However, it decreased in the following quarters but remained above 1, which is a positive sign for the company's liquidity.

The quick ratio, also known as the acid-test ratio, measures the company's ability to pay off its current liabilities without relying on the sale of inventory. This ratio also showed fluctuations over the quarters, with some periods showing improvement while others showing a decline. The highest quick ratio was observed in December 2021, indicating that the company had a stronger ability to cover its short-term obligations without relying on inventory.

The cash ratio, which is the most conservative liquidity ratio, focuses only on the most liquid assets like cash and equivalents to cover short-term liabilities. This ratio remained relatively stable over the quarters, with only slight changes. The cash ratio stayed relatively low, suggesting that CenterPoint Energy Inc might not have a significant amount of cash on hand compared to its short-term liabilities.

Overall, CenterPoint Energy Inc's liquidity ratios show some mixed performance, with improvements in some periods and declines in others. It is important for investors and stakeholders to monitor these ratios to assess the company's ability to meet its short-term obligations.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 55.84 56.29 55.45 51.21 56.10 53.38 46.12 48.45 53.97 58.13 42.52 35.11 43.13 43.59 33.01 28.75 40.65 34.76 25.48 17.63

The cash conversion cycle of CenterPoint Energy Inc, a measure of how efficiently the company manages its working capital, has shown fluctuations over the periods analyzed. The cycle represents the time it takes for the company to convert its investments in inventory into cash flows from sales, ultimately reflecting its ability to manage liquidity and operating expenses.

From March 31, 2020, to December 31, 2024, the trend in the cash conversion cycle shows an overall increase, peaking at 58.13 days on September 30, 2022, before stabilizing around 55-56 days in the later periods. This increasing trend may indicate potential issues with managing accounts payable, inventory turnover, and accounts receivable collection efficiency.

A higher cash conversion cycle suggests that CenterPoint Energy takes longer to collect outstanding receivables, manage inventory levels, and pay its suppliers. While a longer cycle can indicate inefficiencies in working capital management, it is crucial to consider industry norms and the company's specific operational structure for a more precise evaluation.

Overall, CenterPoint Energy should focus on optimizing its working capital processes to potentially shorten its cash conversion cycle, improve liquidity, and enhance overall financial performance and efficiency.