Hess Corporation (HES)
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 | 1.12 | 1.26 | 1.27 | 1.23 | 1.05 | 1.31 | 1.54 | 1.65 | 1.72 | 1.78 | 1.69 | 1.42 | 1.42 | 1.42 | 1.58 | 2.08 | 1.90 | 2.20 | 1.99 | 2.19 |
| Quick ratio | 0.41 | 0.63 | 0.67 | 0.49 | 0.52 | 0.67 | 0.93 | 0.91 | 1.09 | 1.03 | 0.92 | 0.59 | 0.89 | 0.88 | 0.97 | 1.10 | 1.07 | 0.90 | 1.05 | 1.07 |
| Cash ratio | 0.41 | 0.63 | 0.67 | 0.49 | 0.52 | 0.67 | 0.93 | 0.91 | 1.09 | 1.03 | 0.92 | 0.59 | 0.89 | 0.88 | 0.97 | 1.10 | 1.07 | 0.90 | 1.05 | 1.07 |
Hess Corporation's liquidity ratios have demonstrated some fluctuations over the past few years.
The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has generally remained above 1, indicating that the company has had sufficient current assets to meet its current obligations. However, there have been some fluctuations in this ratio, with a peak of 2.20 in September 2020 and a low of 1.05 in December 2021. The ratio has shown a general decline in recent periods, dropping to 1.12 by December 2024.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also fluctuated over the years. Similar to the current ratio, the quick ratio has generally remained above 1, indicating the company's ability to meet its short-term obligations with its most liquid assets. However, the ratio has shown more volatility compared to the current ratio, with a low of 0.41 in December 2024.
The cash ratio, which is the most conservative liquidity ratio as it measures the company's ability to cover current liabilities with cash and cash equivalents only, has also exhibited fluctuations. The cash ratio has generally been lower than the current and quick ratios, reflecting the company's dependence on cash and cash equivalents to meet its short-term obligations.
Overall, while the current, quick, and cash ratios have fluctuated over the years, Hess Corporation has generally maintained liquidity levels that indicate its ability to meet short-term financial obligations. However, the declining trend in these ratios in recent periods may warrant attention to ensure continued liquidity and financial stability.
See also:
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 | 32.20 | 23.52 | 20.93 | 24.13 | 22.14 | 31.25 | 26.68 | 23.09 | 23.23 | 31.42 | 38.41 | 30.15 | 27.79 | 31.91 | 28.08 | 24.92 | 40.39 | 42.93 | 11.33 | 23.03 |
The cash conversion cycle of Hess Corporation has fluctuated over the period provided. The company's cash conversion cycle represents the time taken to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to June 30, 2020, there was a significant improvement in the cash conversion cycle, indicating a more efficient management of working capital. However, the cycle increased in the subsequent quarters, reaching a peak of 42.93 days on September 30, 2020, and remained elevated for the following quarter.
From December 31, 2020, to March 31, 2021, there was a notable reduction in the cycle, suggesting improvements in inventory management or collection of receivables. The cycle fluctuated in the following quarters but generally remained within a range of 20 to 40 days.
As of December 31, 2024, the cash conversion cycle stood at 32.20 days, which is higher than the cycle reported in the initial years but lower than the peaks seen in 2020. Overall, the company should focus on maintaining an optimal balance between inventory turnover, accounts receivable collection, and accounts payable management to ensure efficient working capital utilization.