FirstEnergy Corporation (FE)

Liquidity ratios

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio 0.56 0.48 0.61 0.73 0.74
Quick ratio 0.02 0.03 0.04 0.33 0.35
Cash ratio 0.02 0.03 0.04 0.33 0.35

FirstEnergy Corporation's liquidity ratios indicate a declining trend over the years, reflecting potential challenges in meeting short-term obligations.

The current ratio, a measure of short-term liquidity, has decreased from 0.74 in 2020 to 0.56 in 2024. This suggests that the company may be facing difficulties in covering its current liabilities with its current assets.

Furthermore, the quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also exhibited a decreasing trend from 0.35 in 2020 to 0.02 in 2024. This indicates a significant decline in the company's ability to meet immediate obligations without relying on inventory.

Lastly, the cash ratio, which represents the proportion of liquid assets to current liabilities, has followed a similar trajectory, decreasing from 0.35 in 2020 to 0.02 in 2024. This implies that FirstEnergy's ability to pay off its short-term debts solely with cash and cash equivalents has deteriorated substantially.

In conclusion, the decreasing trend in FirstEnergy Corporation's liquidity ratios raises concerns about its ability to meet its short-term financial commitments and suggests a potential need for improvements in managing liquidity.


Additional liquidity measure

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash conversion cycle days 45.79 40.22 33.46 27.55 37.69

The cash conversion cycle for FirstEnergy Corporation has been fluctuating over the past five years. In December 31, 2020, the company's cash conversion cycle was 37.69 days, indicating that it took approximately 37.69 days to convert its investments in raw materials and other inputs into cash inflows from sales.

By December 31, 2021, the cash conversion cycle improved to 27.55 days, suggesting that the company was managing its working capital more efficiently and collecting cash from its sales faster. However, the cycle slightly increased to 33.46 days by December 31, 2022, which may indicate a potential slowdown in the company's cash conversion efficiency.

In the following years, the cash conversion cycle continued to lengthen. By December 31, 2023, it extended to 40.22 days, and by December 31, 2024, it reached 45.79 days. These increases may imply that the company was facing challenges in managing its working capital effectively, which could impact its liquidity and overall financial performance.

Overall, the trend in FirstEnergy Corporation's cash conversion cycle indicates fluctuations and a general increase over the five-year period, suggesting potential challenges in converting its investments into cash inflows efficiently.