Kinder Morgan Inc (KMI)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.49 | 0.35 | 0.55 | 0.66 | 0.63 |
| Quick ratio | 0.31 | 0.23 | 0.38 | 0.50 | 0.50 |
| Cash ratio | 0.02 | 0.01 | 0.11 | 0.22 | 0.23 |
Kinder Morgan Inc's liquidity ratios show a declining trend over the years. The current ratio, which measures the company's ability to cover its short-term obligations with current assets, decreased from 0.63 in 2020 to 0.49 in 2024. Similarly, the quick ratio, a more stringent measure of liquidity excluding inventories, also dropped from 0.50 to 0.31 during the same period.
The cash ratio, which indicates the proportion of current liabilities covered by cash and cash equivalents, exhibited a steep decline from 0.23 in 2020 to 0.02 in 2024, indicating a significant decrease in the company's ability to meet its short-term obligations using its cash resources alone.
Overall, Kinder Morgan Inc's liquidity position appears to have weakened progressively over the years, as reflected by the downward trajectory of its current, quick, and cash ratios. This suggests a potential increase in liquidity risk and may warrant further investigation into the company's financial health and operational efficiency.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -21.90 | -14.35 | 6.88 | 8.36 | 7.11 |
The cash conversion cycle of Kinder Morgan Inc has shown some fluctuations over the years. In the year ending December 31, 2020, the company had a cash conversion cycle of 7.11 days, indicating that it took approximately 7.11 days for Kinder Morgan to convert its investments in inventory and other resources into cash flows from sales.
By the end of December 31, 2021, the cash conversion cycle increased to 8.36 days, suggesting a slight delay in the company's ability to convert investments into cash. However, in the subsequent year ending December 31, 2022, the cycle improved to 6.88 days, indicating a more efficient conversion of resources into cash.
Interestingly, the data shows a negative cash conversion cycle in the years ending December 31, 2023, and December 31, 2024, with values of -14.35 days and -21.90 days, respectively. A negative cash conversion cycle can indicate that Kinder Morgan Inc is able to generate cash from its sales before having to pay its suppliers, which can be a favorable situation for the company.
Overall, the trend in the cash conversion cycle of Kinder Morgan Inc highlights the company's efficiency in managing its working capital and converting investments into cash, with some variation in performance over the years. The negative values in 2023 and 2024 suggest strong liquidity management and potential advantages in cash flow management for the company.