DT Midstream Inc (DTM)

Based on the provided data, DT Midstream Inc's liquidity ratios have shown significant fluctuations over the years.

1. Current Ratio: The current ratio, which measures the company's ability to cover its short-term obligations with current assets, has seen a drastic improvement from 0.15 in 2020 to 2.03 in 2021. However, there was a sharp decline in 2022 to 0.43 followed by a slight recovery to 0.63 in 2023 and further to 0.97 in 2024. While the current ratio improved significantly in 2021, it has remained below 1 in the subsequent years, indicating potential liquidity concerns.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, gives a more stringent measure of liquidity by excluding inventory from current assets. DT Midstream Inc's quick ratio soared to 10.30 in 2021, reflecting a strong ability to meet short-term obligations without relying on inventory. However, the ratio dropped significantly in 2022 to 0.10 and has shown marginal improvements in the following years, albeit remaining relatively low.

3. Cash Ratio: The cash ratio, which provides the most conservative measure of liquidity by focusing only on cash and cash equivalents to cover current liabilities, mirrored the trend of the quick ratio. DT Midstream Inc's cash ratio spiked to 10.30 in 2021, indicating a robust cash position. However, similar to the quick ratio, the cash ratio declined in 2022 to 0.10 and has shown slight improvements in subsequent years.

Overall, DT Midstream Inc's liquidity ratios have displayed volatility, with a notable improvement in the current ratio in 2021 but subsequent declines in 2022. The quick and cash ratios also followed a similar pattern, highlighting fluctuations in the company's ability to meet short-term obligations with liquid assets. Further analysis and monitoring of liquidity trends will be crucial for assessing the company's financial health and ability to manage liquidity risks effectively.

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Additional liquidity measure

The cash conversion cycle of DT Midstream Inc has shown fluctuations over the years. In 2020 and 2023, the company had a cash conversion cycle of 0.00 days, indicating that it was able to efficiently convert its inventory to cash. However, in 2021 and 2022, the company's cash conversion cycle increased to 39.50 days and 30.07 days, respectively, suggesting that it took longer to convert its inventory into cash during these periods. It is essential for the company to monitor and manage its cash conversion cycle effectively to optimize its working capital management and ensure efficient operations.