Consolidated Edison Inc (ED)

Consolidated Edison, Inc.'s liquidity ratios show the company's ability to meet its short-term obligations. The current ratio has been fluctuating over the past five years, ranging from a low of 0.68 in 2019 to a peak of 1.14 in 2022, but has since decreased to 1.01 by the end of 2023. This ratio indicates that the company may have just enough current assets to cover its current liabilities.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, shows significant variability over the years. The ratio improved from 0.59 in 2019 to 0.91 in both 2021 and 2023, but experienced a sharp drop to 0.47 in 2022. This suggests that the company may have faced challenges in converting its most liquid assets into cash in 2022.

The cash ratio, which reflects the company's ability to cover its current liabilities using only cash and cash equivalents, also demonstrates fluctuations. Consolidated Edison, Inc. improved its cash ratio from 0.25 in 2019 to 0.34 in 2021 before declining to 0.18 in 2022. By the end of 2023, the cash ratio had increased to 0.33. This indicates that the company has been strengthening its position in terms of holding cash to meet short-term obligations.

Overall, while the company's liquidity ratios have shown some improvement in recent years, there are still fluctuations that may indicate challenges in managing short-term obligations effectively. It would be important to closely monitor these ratios to ensure the company maintains sufficient liquidity to meet its financial commitments.

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Additional liquidity measure

The cash conversion cycle of Consolidated Edison, Inc. has shown variability over the past five years.

In 2023, the cash conversion cycle improved significantly to -36.24 days, indicating that the company was able to convert its inventory and receivables into cash more efficiently compared to the previous year. This suggests effective management of working capital and a faster cash turnover.

The cash conversion cycle also improved in 2022 to -55.60 days, showing a positive trend in working capital management. However, there was a slight deterioration in performance in 2021 with a cash conversion cycle of -57.59 days.

The most notable improvement was seen in 2020 when the cash conversion cycle decreased significantly to -97.21 days. This may have been a result of better inventory management and faster collection of receivables during that period.

On the other hand, in 2019, the cash conversion cycle was -51.17 days, indicating a relatively stable performance compared to the following years.

Overall, the decreasing trend in the cash conversion cycle over the years reflects operational efficiency in managing cash flow, inventory, and receivables. Maintaining a negative cash conversion cycle suggests that Consolidated Edison, Inc. has been effective in generating cash from its operating cycle.