Hess Corporation (HES)

Hess Corporation's liquidity ratios have displayed fluctuations over the past five years. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, was at its lowest in 2023 at 1.05, indicating a slight decrease in liquidity compared to the previous year. However, it reached its peak in 2020 at 1.90, reflecting a strong ability to meet short-term liabilities.

The quick ratio, also known as the acid-test ratio, excludes inventory from current assets to provide a more stringent measure of liquidity. Similar to the current ratio, the quick ratio decreased in 2023 to 0.96, indicating a potentially tighter liquidity position compared to 2022. However, in 2020, the quick ratio was at its highest at 1.67, suggesting a stronger ability to meet short-term obligations without relying on inventory.

The cash ratio, which focuses solely on the company's cash and cash equivalents in relation to its current liabilities, exhibited fluctuations as well. In 2023, the cash ratio dropped to 0.55, showing a significant decrease in cash liquidity compared to the previous year. However, in 2022, the cash ratio was at its highest at 1.07, indicating a relatively strong cash position.

Overall, the liquidity ratios of Hess Corporation indicate some variability in the company's ability to meet short-term obligations over the past five years, with a decrease in liquidity observed in 2023 compared to earlier years. Further analysis of the company's working capital management and cash flow trends may provide additional insights into its liquidity position.

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See also:

Hess Corporation Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle of Hess Corporation has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle was 46.18 days, indicating an improvement from the previous year. This suggests that the company is managing its cash more efficiently by reducing the time it takes to convert its inventory and accounts receivables into cash.

Comparing 2023 to 2021 and 2020, where the cash conversion cycle was 59.15 days and 67.26 days respectively, Hess Corporation has made significant progress in optimizing its working capital management. However, the company's cash conversion cycle in 2023 is still higher than the levels seen in 2019, when it was 65.75 days.

Overall, the trend in the cash conversion cycle of Hess Corporation demonstrates efforts to enhance operational efficiency and liquidity management, although further improvements may be necessary to bring the cycle closer to historical lows.