EQT Corporation (EQT)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.99 | 1.08 | 0.44 | 0.69 | 1.30 |
| Quick ratio | 0.49 | 0.82 | 0.30 | 0.45 | 1.18 |
| Cash ratio | 0.04 | 0.39 | 0.02 | 0.13 | 0.51 |
The liquidity ratios of EQT Corp, namely the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term obligations.
1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its current assets. A current ratio of less than 1 indicates potential liquidity issues. Over the past five years, EQT Corp's current ratio has fluctuated significantly, ranging from 0.45 to 1.30. The current ratio decreased from 1.30 in 2019 to 0.99 in 2023, indicating a potential decline in liquidity.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets. EQT Corp's quick ratio mirrors its current ratio over the same period, displaying similar fluctuations. The company's quick ratio was 0.99 in 2023, similar to the current ratio, indicating that the company may struggle to meet its short-term obligations with its most liquid assets.
3. Cash Ratio: The cash ratio is the most conservative liquidity measure, focusing solely on cash and cash equivalents to cover short-term liabilities. EQT Corp's cash ratio has also varied over the past five years, ranging from 0.17 to 0.64. In 2023, the company's cash ratio stood at 0.54, suggesting that EQT Corp relies less on cash to meet its short-term obligations compared to other liquid assets.
Overall, EQT Corp's liquidity ratios have shown mixed results over the past five years, with fluctuations indicating potential changes in the company's liquidity position. Investors and stakeholders should closely monitor these ratios to assess the company's ability to manage its short-term financial obligations.
See also:
EQT Corporation Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 7.47 | -20.98 | 55.86 | 40.34 | 76.97 |
The cash conversion cycle of EQT Corp has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle improved significantly to 48.35 days from 78.28 days in 2022. This indicates that EQT Corp was able to convert its invested cash back into cash generated from sales more efficiently in 2023.
By comparing the current cash conversion cycle with previous years, we can see that in 2021, there was a substantial increase in the cash conversion cycle to 171.27 days, indicating a significant delay in converting invested cash into sales revenue and then back into cash. However, in 2020 and 2019, the cash conversion cycle was relatively lower at 67.60 days and 75.12 days respectively, suggesting better efficiency in managing cash flow within the operations of the company during those years.
Overall, the improving trend in the cash conversion cycle from 2022 to 2023 is a positive sign for EQT Corp, as it indicates better management of working capital and efficient operations in converting inventory and receivables into cash. However, it would be beneficial for the company to maintain this efficiency and strive for further improvements in the cash conversion cycle to optimize its cash flow management.