Edison International (EIX)

The current ratio for Edison International has shown an improving trend over the years, increasing from 0.49 in 2020 to 0.79 in 2023 before dropping significantly to 0.07 in 2024. This ratio indicates that the company's current assets are sufficient to cover its current liabilities, although the 2024 ratio suggests a potential liquidity issue.

The quick ratio, which excludes inventory from current assets, has also displayed a fluctuating pattern, ranging from 0.01 in 2020 to -0.02 in 2023. This implies that the company may have difficulty meeting its short-term obligations without relying on inventory in some years.

Similarly, the cash ratio, which measures the company's ability to cover immediate liabilities with cash and cash equivalents, has experienced fluctuations, with a notable decline in 2023. This decrease may indicate a reduced ability to address short-term financial obligations without relying on other assets.

Overall, the liquidity ratios of Edison International show variability over the years, with some years demonstrating improved liquidity and others indicating potential challenges in meeting short-term obligations. It is essential for the company to carefully manage its liquidity position to ensure financial stability and meet its obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Edison International has shown a decreasing trend from 17.31 days as of December 31, 2020, to 16.69 days as of December 31, 2021, further dropping to 15.59 days by December 31, 2022. This indicates the company is becoming more efficient in its cash management and operations.

However, there was a slight increase in the cash conversion cycle to 19.99 days by December 31, 2023, which may warrant further investigation into the reasons behind this change. Subsequently, the cycle improved to 18.92 days by December 31, 2024, but it still remained higher than the levels seen in 2022.

Overall, the decreasing trend in the cash conversion cycle up to 2022 reflects positively on the company's ability to efficiently convert its resources into cash. The increase in the cycle in 2023 and the subsequent improvement in 2024 highlight potential fluctuations in working capital management that Edison International may need to address for sustained operational effectiveness.