Duke Energy Corporation (DUK)

Based on the data provided, Duke Energy Corporation's liquidity ratios have shown some fluctuations over the years.

1. Current Ratio: The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has increased from 0.53 in 2020 to 0.67 in 2024. While the ratio has generally improved, it is still below 1, indicating that the company may have difficulty meeting its short-term obligations with its current assets alone.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Duke Energy Corporation has maintained a low quick ratio of around 0.02 over the years, suggesting that the company may face challenges in meeting immediate short-term obligations without relying on inventory.

3. Cash Ratio: The cash ratio, which assesses the company's ability to cover its current liabilities with its most liquid assets (cash and cash equivalents), shows a similar trend to the quick ratio. Duke Energy Corporation's cash ratio has been consistently low at around 0.02, indicating limited liquidity in terms of immediate cash availability.

In summary, while Duke Energy Corporation has shown some improvement in its current ratio over the years, the quick ratio and cash ratio remain at low levels, indicating potential liquidity challenges in meeting short-term obligations without relying on inventory or less liquid assets. Investors and stakeholders should monitor these ratios closely to assess the company's liquidity position.

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Additional liquidity measure

The cash conversion cycle of Duke Energy Corporation has fluctuated over the years. As of December 31, 2020, the company's cash conversion cycle was 96.23 days, indicating that it took approximately 96 days for the company to convert its investments in raw materials into cash receipts from customers. By December 31, 2021, the cash conversion cycle improved slightly to 89.80 days, showing that the company was able to manage its working capital more efficiently.

In December 31, 2022, Duke Energy Corporation further optimized its cash conversion cycle to 82.84 days, reflecting a quicker turnaround time in converting its operating activities into cash flows. However, there was a significant increase in the cash conversion cycle as of December 31, 2023, reaching 102.36 days, which may suggest potential challenges in managing cash flows and working capital effectively during that period.

The most notable change occurred on December 31, 2024, where the cash conversion cycle spiked dramatically to 2,912.89 days. Such an exceptionally high value is likely an anomaly or a reporting error, as it is highly unusual and not reflective of normal business operations. It is essential for Duke Energy Corporation to investigate and address the reasons behind such an outlier to ensure the efficiency of its working capital management in the future.