LyondellBasell Industries NV (LYB)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.84 | 1.75 | 1.69 | 2.11 | 1.83 |
| Quick ratio | 0.88 | 0.92 | 0.93 | 1.26 | 0.87 |
| Cash ratio | 0.81 | 0.32 | 0.20 | 0.45 | 0.20 |
The liquidity ratios of LyondellBasell Industries NV have displayed varying trends over the past five years.
1. Current ratio:
- The current ratio measures the company's ability to pay its short-term obligations with its current assets. LyondellBasell's current ratio has fluctuated over the years, ranging from 1.69 in 2021 to 2.11 in 2020.
- A current ratio above 1 indicates that the company has more current assets than current liabilities, suggesting it should be able to meet its short-term obligations.
- The recent current ratio of 1.84 as of Dec 31, 2023, is higher than in the previous year, indicating the company has improved its short-term liquidity position.
2. Quick ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets.
- LyondellBasell's quick ratio has shown a similar fluctuating trend as the current ratio, with values ranging from 0.94 in 2019 to 1.32 in 2020.
- The quick ratio of 1.11 as of Dec 31, 2023, is above 1, indicating that the company can cover its short-term liabilities without relying on inventory.
3. Cash ratio:
- The cash ratio measures the company's ability to cover its short-term obligations with its cash and cash equivalents only.
- LyondellBasell's cash ratio has shown significant variability over the years, from 0.28 in 2019 to 0.55 in 2023.
- The cash ratio of 0.55 as of Dec 31, 2023, indicates that the company has improved its ability to meet its short-term obligations with its cash reserves.
Overall, while there have been fluctuations in LyondellBasell's liquidity ratios over the years, the recent improvements in current ratio, quick ratio, and cash ratio suggest that the company has strengthened its liquidity position and may be better positioned to meet its short-term obligations.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 52.74 | 43.66 | 55.27 | 88.20 | 62.12 |
The cash conversion cycle (CCC) of LyondellBasell Industries NV has fluctuated over the past five years. In 2023, the company's CCC was 45.09 days, showing an increase from the previous year's 39.69 days. This indicates that it took LyondellBasell slightly longer to convert its resources into cash in 2023 compared to 2022.
Looking further back, in 2021, the CCC was 47.15 days, which was higher than both the 2023 and 2022 figures. However, the company experienced a significant decrease in its CCC in 2020, where it took nearly 80 days to convert resources into cash. This suggests a longer processing time for cash flows in 2020.
In contrast, in 2019, the company had a slightly lower CCC compared to 2020, at 56.99 days. Overall, the trend in the company's CCC shows some volatility, with fluctuations in the time taken to convert resources into cash over the past five years. This analysis highlights the importance of monitoring and managing cash flow efficiency for sustainable financial performance.