DT Midstream Inc (DTM)
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 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.63 | 0.47 | 0.58 | 0.36 | 0.43 | 2.14 | 2.86 | 2.35 | 2.03 | 1.59 | 1.68 |
| Quick ratio | 0.53 | 0.42 | 0.53 | 0.31 | 0.36 | 2.03 | 2.68 | 2.13 | 11.28 | 10.08 | 1.39 |
| Cash ratio | 0.13 | 0.07 | 0.12 | 0.14 | 0.10 | 1.43 | 1.92 | 1.49 | 10.30 | 9.31 | 0.35 |
DT Midstream Inc's liquidity ratios show a significant decline in the most recent quarters, indicating potential liquidity challenges. The current ratio, quick ratio, and cash ratio have all deteriorated steadily from Q1 2022 to Q4 2023. The current ratio and quick ratio, which measure the company's ability to meet short-term obligations with current assets, have dropped below 1 in the last two quarters, signaling possible difficulty in covering immediate liabilities. The cash ratio, which specifically assesses the company's ability to pay off current liabilities with cash and cash equivalents, also displays a declining trend, reaching its lowest point in Q4 2023.
Overall, the downward trajectory of these liquidity ratios suggests that DT Midstream Inc may be facing liquidity constraints and should closely monitor its ability to meet short-term financial obligations. It might be prudent for the company to explore strategies to improve its liquidity position, such as reducing expenses, increasing cash reserves, or refinancing debt to ensure financial stability in the future.
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 | ||
|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -80.69 | -135.44 | -133.16 | -103.24 | -100.80 | -55.39 | 22.86 | 46.97 |
The cash conversion cycle of DT Midstream Inc has shown variability over the past eight quarters. The company's cash conversion cycle ranged from 48.14 days to 66.90 days during this period.
It is noted that in Q1 2023, the company had the lowest cash conversion cycle of 48.14 days, indicating efficient management of its cash resources, inventory, and accounts receivable. However, in Q4 2023, the cash conversion cycle increased to 66.90 days, suggesting potential challenges in managing cash flow and converting inventory and receivables into cash.
Overall, DT Midstream Inc's cash conversion cycle has fluctuated, but it is essential for the company to focus on optimizing its working capital management to improve efficiency and profitability. Tracking these fluctuations over time can provide insights into the company's operational performance and financial health.