Chevron Corp (CVX)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.06 | 1.27 | 1.47 | 1.26 | 1.18 |
| Quick ratio | 0.18 | 0.25 | 0.52 | 0.21 | 0.25 |
| Cash ratio | 0.18 | 0.25 | 0.52 | 0.21 | 0.25 |
Chevron Corp's liquidity ratios show mixed performance over the years. The current ratio has improved steadily from 1.18 in 2020 to 1.47 in 2022, indicating the company's ability to meet short-term obligations with its current assets. However, there was a slight dip to 1.06 in 2024, which suggests a potential decrease in the company's short-term liquidity position.
The quick ratio, which measures the company's ability to cover immediate liabilities with its most liquid assets, shows some volatility. While there was an increase from 0.21 in 2021 to 0.52 in 2022, it fell to 0.18 in 2024. This decrease may indicate a reduction in Chevron's ability to quickly pay off its short-term obligations without relying on inventory.
The cash ratio, which is the most stringent measure of liquidity as it considers only cash and cash equivalents, also displays a similar trend as the quick ratio. It improved from 0.21 in 2021 to 0.52 in 2022 but then declined to 0.18 in 2024. This suggests that Chevron may have less cash on hand relative to its current liabilities in 2024 compared to 2022.
Overall, Chevron's liquidity ratios show some variability, with improvements in certain years followed by declines. It is important for investors and stakeholders to closely monitor these ratios to assess the company's ability to manage its short-term financial obligations effectively.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 24.27 | 23.02 | 18.61 | 22.51 | 28.91 |
The cash conversion cycle of Chevron Corp has shown a decreasing trend over the past five years. As of December 31, 2020, the company had a cash conversion cycle of 28.91 days, which decreased to 22.51 days by December 31, 2021. This trend continued as the cash conversion cycle further decreased to 18.61 days by December 31, 2022.
However, there was a slight increase in the cash conversion cycle to 23.02 days by December 31, 2023, followed by another increase to 24.27 days by December 31, 2024. Despite these slight increases in the last two years, the overall trend indicates an improvement in managing the company's cash conversion cycle, which is a positive indicator of efficiency in managing working capital and generating cash flows.