Alliant Energy Corp (LNT)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.44 | 0.55 | 0.53 | 0.52 | 0.68 |
| Quick ratio | 0.03 | 0.03 | 0.01 | 0.27 | 0.04 |
| Cash ratio | 0.03 | 0.03 | 0.01 | 0.27 | 0.04 |
Alliant Energy Corp's liquidity ratios show a declining trend over the years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, decreased from 0.68 in 2020 to 0.44 in 2024. This indicates a potential strain on the company's liquidity position.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also decreased from 0.27 in 2021 to 0.03 in 2024. This suggests a decrease in the company's ability to cover its short-term liabilities with its most liquid assets.
Similarly, the cash ratio, which focuses solely on cash and cash equivalents to cover short-term liabilities, decreased from 0.27 in 2021 to 0.03 in 2024. This indicates a lower proportion of cash available to meet immediate financial obligations.
Overall, the downward trend in these liquidity ratios for Alliant Energy Corp raises concerns about its ability to efficiently manage its short-term financial obligations. Investors and creditors may view this as a signal of potential liquidity challenges that the company may face in the future.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 48.92 | 54.60 | 47.53 | 42.49 | 40.56 |
The cash conversion cycle of Alliant Energy Corp has shown a consistent increase over the past five years. As of December 31, 2020, the company had a cash conversion cycle of 40.56 days, which extended to 42.49 days by December 31, 2021. Subsequently, there was a noticeable jump in the cycle to 47.53 days by December 31, 2022, followed by another increase to 54.60 days by December 31, 2023. However, the cycle slightly improved to 48.92 days by December 31, 2024.
This trend indicates that the company may be experiencing challenges in efficiently managing its working capital and converting its inputs into cash. The increasing cash conversion cycle suggests that Alliant Energy Corp may be taking longer to collect on its receivables, pay its suppliers, and convert inventory into sales revenue. It would be important for the company to focus on optimizing its working capital management to potentially improve its cash conversion cycle and enhance overall liquidity.