Evergy Inc. Common Stock (EVRG)

Evergy Inc's liquidity ratios have shown a declining trend over the past five years, indicating potential challenges in meeting short-term obligations with its current assets.

The current ratio has decreased from 0.63 in 2019 to 0.51 in 2023, which suggests a deterioration in the company's ability to cover its short-term liabilities with its current assets. Similarly, the quick ratio has also decreased from 0.28 in 2019 to 0.19 in 2023, indicating a decrease in the company's ability to pay off its current liabilities without relying on inventory.

The cash ratio has shown fluctuations over the period but has generally decreased from 0.14 in 2019 to 0.11 in 2023. This ratio indicates the company's ability to cover its short-term liabilities with its cash and cash equivalents alone, and the declining trend suggests potential liquidity challenges.

Overall, Evergy Inc's liquidity position based on these ratios appears to have weakened, and the company may need to focus on improving its liquidity management to ensure its ability to meet short-term obligations efficiently.

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Additional liquidity measure

The cash conversion cycle for Evergy Inc has shown fluctuations over the past five years. In 2023, the company had a cash conversion cycle of 56.68 days, indicating that it took approximately 56.68 days to convert its investments in inventory and other resources into cash flows from sales. This represents an increase compared to the previous year, suggesting potential challenges in managing working capital efficiently.

In 2022, the company had a cash conversion cycle of 34.67 days, reflecting a shorter period to convert investments into cash flows, which could indicate more effective management of inventory and accounts receivable.

The negative cash conversion cycle in 2021 (-0.81 days) and 2020 (-24.63 days) implies that Evergy Inc was able to convert investments into cash flows before payments were due, a favorable sign indicating strong liquidity management and efficient working capital practices during those years.

In 2019, the company had a cash conversion cycle of 8.64 days, showing a relatively shorter period compared to 2023, but suggesting the need for potential improvement in managing working capital to enhance operational efficiency.

Overall, Evergy Inc's cash conversion cycle has fluctuated over the years, highlighting the importance of effective working capital management to optimize cash flows and sustain operational performance.