DTE Energy Company (DTE)

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 0.71 0.83 0.69 0.75 0.60 0.85 0.89 0.88 0.81 0.79 0.59 0.64 0.52 1.02 1.71 1.69 1.30 1.12 0.83 0.89
Quick ratio 0.36 0.54 0.44 0.42 0.31 0.40 0.42 0.45 0.43 0.40 0.35 0.38 0.32 0.56 0.96 1.25 0.86 0.73 0.55 1.05
Cash ratio 0.00 0.30 0.17 0.10 0.00 0.01 0.01 0.03 0.01 0.04 0.03 0.06 0.03 0.07 0.50 0.60 0.19 0.28 0.14 0.61

DTE Energy Company's liquidity ratios indicate its ability to meet short-term financial obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, demonstrated some fluctuation over the periods analyzed. It started at a relatively low level of 0.89 in March 2020, improved steadily and peaked at 1.71 in June 2021 before decreasing to 0.71 by December 2024. A current ratio above 1 is generally considered healthy, as it suggests that the company has more current assets than current liabilities.

The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, also showed variability over the years. It began at 1.05 in March 2020, fell to 0.32 in December 2021, and then slightly recovered to 0.36 by December 2024. A quick ratio above 1 is usually preferred as it indicates that the company can meet its short-term obligations without relying on the sale of inventory.

The cash ratio, which assesses the company's ability to cover its current liabilities with cash and cash equivalents, varied significantly during the periods examined. Starting at 0.61 in March 2020, it dropped to 0.03 by December 2021 and rose to 0.30 by September 2024. A higher cash ratio is generally more favorable as it indicates a stronger ability to meet short-term obligations solely with cash on hand.

Overall, while DTE Energy Company's liquidity ratios experienced fluctuations, it is essential for the company to maintain a healthy balance between current assets and current liabilities to ensure ongoing financial stability and meet its short-term obligations effectively.

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 1,592.10 1,404.35 1,579.47 1,830.69 1,368.25 110.51 12.95 -62.95 -203.39 -186.13 -292.19 -175.46 -156.87 -107.58 -345.14 -300.67 -269.64 -15.24 -45.98 -78.99

The cash conversion cycle of DTE Energy Company has shown significant fluctuations over the period from March 31, 2020, to December 31, 2024.

Initially, the company had negative cash conversion cycle days, indicating efficient management of cash flows, with the cycle gradually increasing to positive days by December 31, 2023 and further increasing substantially by the end of June 30, 2024.

During the first half of the period, the negative cycle days indicated that DTE Energy was able to convert its investments in production and other resources into cash quickly. However, the sharp increase in cycle days towards the end of 2023 and into 2024 suggests a potential decrease in efficiency in managing accounts receivable, inventory, and accounts payable.

Overall, the trend in the cash conversion cycle of DTE Energy Company reveals a shift from efficient cash management to potential challenges in converting resources into cash, highlighting the importance of closely monitoring working capital components to optimize liquidity management.