Consolidated Edison Inc (ED)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.51 | 1.01 | 1.14 | 1.02 | 0.72 |
| Quick ratio | 0.00 | 0.27 | 0.16 | 0.37 | 0.35 |
| Cash ratio | 0.00 | 0.27 | 0.16 | 0.37 | 0.35 |
Consolidated Edison Inc's liquidity ratios have shown fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, improved from 0.72 in 2020 to 1.14 in 2022 before declining to 0.51 in 2024. This indicates that the company's short-term liquidity position has varied significantly.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also saw fluctuations. It increased from 0.35 in 2020 to 0.37 in 2021 but then dropped to 0.16 in 2022 and further down to 0.00 in 2024. This suggests that the company may have faced challenges in meeting its short-term obligations without relying on inventory in the most recent year.
The cash ratio, which provides an even stricter measure of liquidity by considering only cash and cash equivalents, mirrored the trend of the quick ratio. It followed the same path of improvement up to 2021 before declining to 0.00 in 2024. This indicates a potential strain on the company's ability to meet short-term obligations with its readily available cash resources.
Overall, the liquidity ratios of Consolidated Edison Inc show a mixed performance over the years, with fluctuations in the ability to cover short-term obligations using different levels of current assets. Investors and creditors should closely monitor these ratios to assess the company's liquidity risk and financial health.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 64.63 | 23.59 | 22.49 | 26.55 | 25.49 |
Consolidated Edison Inc's cash conversion cycle has shown fluctuations over the past five years. As of December 31, 2020, the company had a cash conversion cycle of 25.49 days, which increased slightly to 26.55 days by December 31, 2021. However, there was a notable improvement by December 31, 2022, with the cycle decreasing to 22.49 days. Subsequently, by December 31, 2023, the cycle increased to 23.59 days.
The most significant change occurred by December 31, 2024, where the cash conversion cycle spiked to 64.63 days, indicating a substantial delay in ConEd's cash inflows relative to its cash outflows. This prolonged cycle may suggest inefficiencies in managing the company's working capital, potentially impacting its liquidity and overall financial health. Further analysis and monitoring of the cash conversion cycle trend would be prudent to assess ConEd's operational efficiency and financial performance.