Kinder Morgan Inc (KMI)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.35 | 0.39 | 0.49 | 0.56 | 0.55 | 0.62 | 0.52 | 0.47 | 0.66 | 0.46 | 0.85 | 0.81 | 0.63 | 0.61 | 0.48 | 0.55 | 0.63 | 0.17 | 0.41 | 0.45 |
| Quick ratio | 0.26 | 0.25 | 0.32 | 0.37 | 0.38 | 0.39 | 0.32 | 1.44 | 1.78 | 1.57 | 0.55 | 0.61 | 0.50 | 0.41 | 0.31 | 0.28 | 0.49 | 0.11 | 0.25 | 0.31 |
| Cash ratio | 0.04 | 0.01 | 0.09 | 0.09 | 0.11 | 0.09 | 0.02 | 1.18 | 1.50 | 1.33 | 0.27 | 0.30 | 0.23 | 0.14 | 0.10 | 0.06 | 0.22 | 0.02 | 0.04 | 0.04 |
Kinder Morgan Inc's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, have shown a declining trend over the past eight quarters. The current ratio, a measure of the company's ability to cover its short-term liabilities with its short-term assets, has decreased from 0.55 in Q4 2022 to 0.35 in Q4 2023. This indicates a potential strain on the company's ability to meet its short-term obligations.
Similarly, the quick ratio, which excludes inventory from current assets to provide a more conservative measure of liquidity, has also decreased from 0.45 in Q4 2022 to 0.28 in Q4 2023. This suggests that Kinder Morgan Inc may have difficulty meeting its immediate liabilities without relying on inventory.
Furthermore, the cash ratio, which measures a company's ability to cover its current liabilities with its cash and cash equivalents, has also decreased from 0.18 in Q4 2022 to 0.06 in Q4 2023. This indicates a decreasing level of cash availability relative to its current liabilities.
Overall, the declining trend in Kinder Morgan Inc's liquidity ratios suggests a potential liquidity risk for the company, as its ability to meet short-term obligations with its current assets has weakened over the past quarters. The company may need to closely monitor its cash flow management and working capital to ensure it can effectively manage its liquidity position in the future.
See also:
Kinder Morgan Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -14.35 | -13.62 | 0.75 | 6.65 | 6.88 | 9.32 | 8.48 | 13.72 | 8.36 | -8.10 | -1.52 | -5.51 | -8.54 | -14.64 | -5.79 | -8.67 | -8.85 | -6.92 | -1.24 | -2.36 |
The cash conversion cycle measures the time it takes for a company like Kinder Morgan Inc to convert its investments in inventory and other resources into cash flows from sales. A negative cash conversion cycle indicates that the company is efficiently managing its working capital, essentially operating with negative working capital, which can be a positive sign of strong operational efficiency and effective management of inventory and accounts receivable.
Examining the quarterly trend of Kinder Morgan Inc's cash conversion cycle, we observe that for Q4 2023 and Q3 2023, the company continued to have a negative cash conversion cycle, with values of -24.36 days and -22.33 days, respectively. This suggests that Kinder Morgan Inc is effectively converting its investments into cash, potentially paying its suppliers after collecting cash from customers.
However, in the earlier quarters of 2023 and Q1 2023, the cash conversion cycle increased to -3.13 days and 4.46 days, respectively, indicating a temporary shift towards a more traditional cash conversion model where the company may have increased its investment in inventory or experienced delays in collecting cash from customers.
When compared to the same quarters in 2022, we notice a general improvement in the cash conversion cycle performance, showing consistent efficiency over time. The trend of recent quarters suggests that Kinder Morgan Inc has been effectively managing its working capital and operating efficiently in converting resources into cash, which is a positive indicator of its financial health and management practices.