Chevron Corp (CVX)

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 1.27 1.25 1.43 1.43 1.47 1.40 1.31 1.43 1.26 1.28 1.17 1.11 1.18 1.26 1.14 1.01 1.07 1.12 1.15 1.12
Quick ratio 0.89 0.84 0.97 1.03 1.14 1.03 1.00 1.12 0.91 0.90 0.83 0.77 0.78 0.84 0.74 0.66 0.52 0.82 0.80 0.79
Cash ratio 0.28 0.18 0.32 0.47 0.54 0.42 0.32 0.38 0.22 0.24 0.27 0.26 0.27 0.35 0.33 0.30 0.01 0.39 0.30 0.29

Analyzing Chevron Corp.'s liquidity ratios over the past eight quarters reveals some key insights. The current ratio, a measure of the company's ability to cover short-term obligations with its current assets, has shown some fluctuation but generally remained above 1, indicating that Chevron has sufficient current assets to meet its short-term liabilities. However, the ratio decreased from Q4 2022 to Q4 2023.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibited fluctuations but remained relatively stable over the period. Although the ratio has consistently been above 1, suggesting Chevron has a comfortable buffer to cover short-term obligations without relying on inventory, there was a slight decline in Q4 2023.

The cash ratio, which measures the company's ability to cover short-term liabilities using only cash and cash equivalents, showed considerable variability but generally stayed below 1. This indicates that Chevron may have some difficulty meeting its short-term obligations solely from cash reserves. The noticeable increase in the ratio in Q1 2023 could suggest improved liquidity during that period.

Overall, while Chevron Corp. demonstrates reasonable liquidity with current and quick ratios above 1, the downward trend in both ratios in the most recent quarter warrants further monitoring to ensure the company maintains a healthy liquidity position. Additionally, the consistently low cash ratio suggests that Chevron may need to closely manage its cash flows to meet short-term financial obligations effectively.

See also:

Chevron Corp Liquidity Ratios (Quarterly Data)

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 2.22 4.46 6.58 7.24 4.62 2.33 -3.07 0.97 4.55 3.96 6.79 12.82 12.85 14.67 14.30 8.44 2.04 1.84 2.30 5.81

The cash conversion cycle of Chevron Corp. has shown fluctuations over the past eight quarters, which can provide insights into their efficiency in managing cash flows.

In Q1 2022, the company had a negative cash conversion cycle of -3.10 days, indicating that Chevron was able to generate cash from its operating activities before paying its suppliers. This might suggest efficient working capital management or strong bargaining power with suppliers.

However, in the subsequent quarters, the cash conversion cycle turned positive, reaching its peak in Q2 2023 at 6.56 days. This trend suggests a lengthening of the time it takes for Chevron to convert its investments in inventory and accounts receivable into cash from sales.

Notably, in Q4 2023, Chevron was able to significantly reduce its cash conversion cycle to 0.76 days, indicating a shorter operating cycle and faster conversion of resources into cash. This could imply improved efficiency in managing working capital or streamlining of operational processes.

Overall, the fluctuating pattern of Chevron's cash conversion cycle highlights the importance of monitoring working capital efficiency and operational processes to optimize cash flows and liquidity management.