Evergy, Inc. (EVRG)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 0.50 0.55 0.59 0.57 0.51 0.39 0.46 0.52 0.53 0.52 0.50 0.51 0.55 0.67 0.64 0.62 0.69 0.91 0.86 0.72
Quick ratio 0.01 0.01 0.01 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.09 0.21 0.14 0.26 0.08 0.13
Cash ratio 0.01 0.01 0.01 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.09 0.21 0.14 0.26 0.08 0.13

Based on the provided data, let's analyze Evergy, Inc.'s liquidity ratios:

1. Current Ratio: Evergy's current ratio has shown a declining trend over the past few years, starting at 0.72 in March 2020 and decreasing to 0.50 by June 2022 before slightly recovering to 0.55 by December 2022. The ratio then fluctuated but remained low through 2024, indicating a potential strain on the company's ability to meet short-term obligations with its current assets.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, reflects Evergy's ability to pay off its current liabilities with its most liquid assets. The company's quick ratio has consistently been very low, indicating a lack of significant liquid assets to cover short-term obligations. It hovered around 0.01 from December 2020 to December 2024, suggesting a limited ability to meet immediate payment demands without relying on selling inventory or obtaining external financing.

3. Cash Ratio: The cash ratio measures Evergy's ability to cover its current liabilities with its cash and cash equivalents alone. Similar to the quick ratio, the cash ratio has been consistently low, staying at 0.01 from September 2021 to December 2024. This implies that Evergy may face challenges in meeting its short-term obligations solely through its existing cash reserves.

In conclusion, the liquidity ratios of Evergy, Inc. indicate potential liquidity challenges, as both the current ratio and quick ratio are below industry benchmarks and have been on a declining trend. The company may need to closely monitor its liquidity position and consider strategies to improve its short-term financial health, such as managing working capital more efficiently or accessing additional sources of liquidity when needed.


Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 102.37 89.25 87.35 96.07 94.03 92.28 85.59 81.54 76.05 73.10 83.70 85.53 70.00 68.08 67.40 62.03 72.92 73.13 73.03 68.90

The cash conversion cycle of Evergy, Inc. has shown fluctuations over the past few years, indicating changes in the efficiency of its working capital management. The cycle measures the time it takes for Evergy to convert its investments in inventory and accounts receivable into cash flow from sales.

From March 31, 2020, where the cycle was 68.90 days, it gradually increased throughout the year, reaching 73.03 days by June 30, 2020. This trend continued, and by December 31, 2024, the cycle had extended to 102.37 days.

Notably, there are periods of improvement within the overall trend. For instance, in March 31, 2021, the cycle decreased to 62.03 days, suggesting better efficiency in managing working capital. However, this improvement was not sustained, as the cycle increased again in the following quarters.

The increasing trend in the cash conversion cycle from 2020 to 2024 indicates that Evergy may be taking longer to collect receivables and convert inventory into sales, which can tie up cash flow and reduce liquidity. This trend may raise concerns about the company's working capital management efficiency and its ability to optimize cash flow.

Overall, a prolonged cash conversion cycle may indicate potential inefficiencies in working capital management, which could impact Evergy's financial health and liquidity position in the long run. Monitoring and improving this cycle is crucial for maintaining financial stability and sustainable growth.