Exelon Corporation (EXC)

Exelon Corp.'s liquidity ratios indicate its ability to meet short-term obligations and manage financial obligations efficiently. The current ratio has shown fluctuation over the past five years, ranging from 0.69 to 0.98, with a current ratio of 0.81 as of Dec 31, 2023. This ratio suggests that Exelon may face challenges in covering its current liabilities with its current assets alone.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also displayed variability over the years, ranging from 0.57 to 0.74. As of Dec 31, 2023, the quick ratio stands at 0.68, indicating a slight improvement in Exelon's ability to meet short-term obligations without relying on inventory.

Furthermore, the cash ratio, reflecting Exelon's ability to cover immediate obligations with cash and cash equivalents, has ranged from 0.23 to 0.41 over the past five years. As of Dec 31, 2023, the cash ratio is at 0.33, implying that Exelon holds a modest level of cash relative to its current liabilities.

Overall, Exelon's liquidity ratios suggest a relatively weaker liquidity position, as indicated by the current and quick ratios consistently below 1.0. The cash ratio, while demonstrating an improvement over the years, still indicates room for enhancement in holding more liquid assets to meet short-term obligations comfortably. Investors and creditors may monitor these liquidity metrics closely to assess Exelon's ability to navigate short-term financial challenges effectively.

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Additional liquidity measure

The cash conversion cycle, a measure of how efficiently a company manages its working capital, has been fluctuating for Exelon Corp. over the past five years.

In 2023, the cash conversion cycle improved significantly, showing a negative value of -34.33 days, which indicates a faster conversion of inventory and receivables into cash compared to the previous year. This implies that Exelon Corp. was able to collect cash from customers and manage inventory efficiently during this period.

In contrast, in 2022, the cash conversion cycle deteriorated to -86.47 days, suggesting that Exelon Corp. took longer to convert its investments in inventory and accounts receivable into cash. This may be an indication of inefficiencies in managing working capital during that year.

Furthermore, in 2021 and 2020, the company had positive cash conversion cycles of 3.72 days and 3.39 days, respectively. These positive values indicate that Exelon Corp. required more time to convert its investments in inventory and receivables into cash during those years.

Lastly, in 2019, the cash conversion cycle was 23.12 days, indicating a moderate efficiency in managing working capital during that year.

Overall, Exelon Corp. has experienced fluctuations in its cash conversion cycle over the past five years, with improvements in efficiency in some years and inefficiencies in others. Monitoring and managing the cash conversion cycle effectively is crucial for maintaining a healthy level of liquidity and optimizing the company's working capital management.