Eversource Energy (ES)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.67 | 0.56 | 0.64 | 0.65 | 0.62 | 0.71 | 0.77 | 0.62 | 0.56 | 0.72 | 0.64 | 0.57 | 0.64 | 0.89 | 0.72 | 0.75 | 0.67 | 0.59 | 0.61 | 0.50 |
| Quick ratio | 0.23 | -0.17 | 0.24 | 0.27 | 0.28 | 0.36 | 0.36 | 0.30 | 0.23 | 0.36 | 0.32 | 0.27 | 0.31 | 0.52 | 0.37 | 0.35 | 0.29 | 0.32 | 0.34 | 0.28 |
| Cash ratio | 0.01 | -0.37 | 0.01 | 0.01 | 0.06 | 0.09 | 0.04 | 0.04 | 0.02 | 0.06 | 0.08 | 0.04 | 0.06 | 0.21 | 0.07 | 0.05 | 0.02 | 0.05 | 0.06 | 0.03 |
The liquidity ratios of Eversource Energy over the past eight quarters indicate a fluctuating trend in the company's ability to meet its short-term financial obligations.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown variability, ranging from 0.56 to 0.77. These ratios suggest that Eversource Energy has struggled at times to maintain a strong level of liquidity relative to its current liabilities.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also reveals a similar pattern of fluctuation. Ranging from 0.50 to 0.71, the quick ratio indicates that the company may face challenges in meeting its immediate financial obligations without relying on inventory.
Furthermore, the cash ratio, which provides insight into the company's ability to cover its short-term liabilities using only cash and cash equivalents, has exhibited a declining trend, fluctuating between 0.27 and 0.36. This suggests that Eversource Energy's level of cash reserves compared to its current liabilities has diminished over the periods analyzed.
Overall, based on the liquidity ratios observed, Eversource Energy may need to focus on managing its short-term liquidity more effectively to ensure it can meet its financial obligations in a timely manner.
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -124.45 | -238.79 | -213.41 | -339.30 | -347.72 | -209.66 | -214.92 | -254.74 | -348.59 | -259.65 | -205.62 | -168.52 | -297.53 | -289.31 | -219.64 | -127.50 | -215.28 | -146.71 | -163.56 | -212.85 |
The cash conversion cycle of Eversource Energy has shown varying trends over the past eight quarters. The company's cash conversion cycle, which represents the average time it takes for Eversource to convert its investments in inventory and other resources into cash inflows from sales, has exhibited fluctuations in efficiency.
In Q4 2023, the cash conversion cycle improved significantly to -45.41 days compared to the previous quarter, Q3 2023, where it was -31.23 days. This suggests that Eversource was able to manage its cash flow and working capital more effectively during this period.
Looking back further, in Q4 2022, the cash conversion cycle was at its lowest point of -74.47 days, indicating a longer period required to convert investments into cash compared to the latest quarter. Eversource made significant progress in reducing this cycle in subsequent quarters.
Overall, the recent improvements in the cash conversion cycle reflect efficient management of inventory, accounts receivable, and accounts payable by Eversource Energy. However, continued monitoring and optimization of working capital processes will be essential for sustaining and enhancing financial performance in the future.