EOG Resources Inc (EOG)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 2.44 | 1.90 | 2.12 | 1.69 | 1.18 |
| Quick ratio | 1.96 | 1.60 | 1.87 | 1.42 | 0.90 |
| Cash ratio | 1.30 | 1.08 | 1.29 | 0.98 | 0.45 |
The liquidity ratios of EOG Resources, Inc. indicate the company's ability to meet its short-term financial obligations.
The current ratio has shown a consistent improvement over the past five years, increasing from 1.18 in 2019 to 2.44 in 2023. This suggests that EOG Resources has a strong ability to cover its current liabilities with its current assets. A current ratio above 1 indicates that the company can pay off its short-term obligations.
The quick ratio also reflects a positive trend, rising from 1.00 in 2019 to 2.13 in 2023. This ratio excludes inventory from current assets, providing a more stringent measure of liquidity. A quick ratio above 1 is generally considered healthy, indicating that EOG Resources can meet its short-term liabilities without relying on selling inventory.
The cash ratio, which is the most conservative measure of liquidity, has also shown improvement over the years, increasing from 0.52 in 2019 to 1.46 in 2023. This ratio assesses the company's ability to cover its current liabilities using only its cash and cash equivalents. A cash ratio above 1 indicates that EOG Resources can fully cover its short-term obligations with its cash on hand.
Overall, the liquidity ratios of EOG Resources, Inc. demonstrate a strengthening financial position in terms of meeting short-term obligations, indicating effective management of working capital and financial resources.
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Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -416.05 | -481.06 | -578.17 | -94.45 | -528.18 |
The cash conversion cycle of EOG Resources, Inc. has ranged from 41.15 days to 50.91 days over the past five years. A lower number indicates that the company is able to convert its investments in inventory and receivables into cash more quickly.
In 2020, the cash conversion cycle was at its highest at 50.91 days, indicating a longer period for the company to convert its investments into cash. This trend improved slightly in 2021 as the cycle decreased to 45.76 days. However, in 2022, there was a further improvement with the cycle decreasing to 40.89 days, suggesting more efficient management of cash flow.
In 2023, the cash conversion cycle increased slightly to 41.15 days, still lower than the levels seen in 2020 and 2019. This indicates that EOG Resources, Inc. has been able to effectively manage its working capital and convert its assets into cash more efficiently in recent years.
Overall, the trend in the cash conversion cycle for EOG Resources, Inc. shows a recent improvement in managing working capital, which is a positive indicator of the company's financial management efficiency.