Coterra Energy Inc (CTRA)

Coterra Energy Inc's liquidity ratios show a generally improving trend over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, increased from 1.07 in 2020 to 2.92 in 2024. This indicates that the company's liquidity position strengthened significantly during this period.

Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also improved from 0.93 in 2020 to 2.77 in 2024. This suggests that the company has a sufficient level of highly liquid assets to cover its short-term obligations without relying on selling inventory.

Furthermore, the cash ratio, representing the company's ability to cover its current liabilities with cash and cash equivalents, shows a positive trend from 0.36 in 2020 to 1.79 in 2024. This indicates that Coterra Energy Inc has been increasing its cash reserves relative to its short-term obligations, enhancing its ability to meet immediate financial needs.

Overall, Coterra Energy Inc's liquidity ratios exhibit a strong improvement over the years, reflecting a healthier liquidity position and better ability to meet its short-term obligations. It suggests that the company has been managing its current assets effectively to ensure liquidity and financial stability.

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Additional liquidity measure

The cash conversion cycle of Coterra Energy Inc has shown a consistent improvement over the years. As of December 31, 2020, the company's cash conversion cycle was -76.93 days, indicating negative working capital and efficient cash management. By December 31, 2021, the cycle further decreased to -179.88 days, reflecting a significant improvement in the company's ability to convert inventory and receivables into cash.

Subsequently, by December 31, 2022, the cash conversion cycle continued to decline to -253.68 days, indicating that Coterra Energy Inc was able to further streamline its working capital processes and enhance its cash conversion efficiency. As of December 31, 2023, the cycle remained negative at -247.54 days, demonstrating the company's strong working capital management practices.

By the end of December 31, 2024, the cash conversion cycle stood at -222.00 days, showcasing Coterra Energy Inc's sustained ability to efficiently manage its cash flows and convert operational inputs into cash receipts. Overall, the trend of decreasing cash conversion cycle figures suggests that Coterra Energy Inc has been effectively optimizing its working capital management and liquidity position over the years.