Consolidated Edison Inc (ED)

Consolidated Edison Inc's liquidity position can be analyzed through its current ratio, quick ratio, and cash ratio.

The current ratio demonstrates the company's ability to meet its short-term obligations with its current assets. From March 31, 2020, to December 31, 2024, the current ratio ranged from 0.59 to 1.14. The current ratio has shown fluctuations over the years but seems to have stabilized around 1. This indicates that the company has improved its ability to cover short-term liabilities with its current assets.

The quick ratio, which provides a stricter measure of liquidity by excluding inventory from current assets, ranged from 0.01 to 0.35 during the same period. The quick ratio shows a lower level of liquidity compared to the current ratio. However, it improved from the initial period and generally showed an increasing trend, suggesting a better ability to meet short-term obligations using more liquid assets.

The cash ratio, which is the most stringent liquidity measure focusing only on cash and cash equivalents, followed a similar trend as the quick ratio, ranging from 0.01 to 0.35. The cash ratio generally increased over the years, indicating an enhanced ability to pay off short-term liabilities with cash resources.

Overall, the liquidity ratios of Consolidated Edison Inc have shown improvement and indicate a strengthening ability to cover short-term obligations with current and liquid assets. This trend suggests that the company has been managing its liquidity effectively and is in a stable position to meet its short-term financial commitments.

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Additional liquidity measure

The cash conversion cycle of Consolidated Edison Inc has exhibited fluctuations over the periods under review. The cycle indicates the time taken for the company to convert its investments in inventory and other resources into cash flows from sales.

The data reveals that the company's cash conversion cycle ranged from a low of 19.04 days on March 31, 2023, to a high of 26.97 days on September 30, 2022. Overall, the trend shows some variability but no clear upward or downward trajectory over the period.

Understanding the implications of these variations requires further investigation into the company's operations and financial strategies. A shorter cash conversion cycle generally indicates better liquidity and efficiency in managing working capital. Conversely, longer cycles may suggest inefficiencies in inventory management or difficulties in collecting receivables.

Analyzing the cash conversion cycle alongside other financial metrics and industry benchmarks can provide more insights into Consolidated Edison Inc's operational efficiency and financial health. Further analysis and comparisons with its peers may help in identifying areas for improvement or potential risks to the company's financial performance.