Marathon Petroleum Corp (MPC)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.17 | 1.59 | 1.76 | 1.70 | 1.81 |
| Quick ratio | 0.25 | 0.51 | 0.59 | 0.61 | 0.38 |
| Cash ratio | 0.25 | 0.51 | 0.59 | 0.61 | 0.38 |
Based on the provided data, Marathon Petroleum Corp's liquidity ratios have shown some fluctuations over the years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, decreased from 1.81 in 2020 to 1.17 in 2024. Despite the decline, the current ratio has generally remained above 1, indicating that the company has had sufficient current assets to cover its short-term liabilities.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also experienced fluctuations, ranging from 0.38 in 2020 to 0.25 in 2024. This indicates that Marathon Petroleum Corp may have had some challenges in meeting its short-term obligations without relying on inventory.
The cash ratio, which shows the proportion of a company's current assets held in cash or cash equivalents, has followed a similar trend as the quick ratio, decreasing from 0.38 in 2020 to 0.25 in 2024. This suggests that the company's cash position relative to its current liabilities has weakened over the years.
Overall, while Marathon Petroleum Corp has generally maintained a current ratio above 1, indicating a certain level of liquidity, the downward trend in the quick and cash ratios may signal potential challenges in meeting short-term obligations with readily available assets. It would be essential for the company to closely monitor its liquidity position and manage its current assets efficiently to ensure continued financial stability.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 27.66 | 26.45 | 21.24 | 26.73 | 44.42 |
The cash conversion cycle of Marathon Petroleum Corp has shown a declining trend over the years, indicating improved efficiency in managing its working capital. As of December 31, 2020, the company's cash conversion cycle stood at 44.42 days, which decreased to 26.73 days by December 31, 2021. Subsequently, there was a further reduction to 21.24 days by December 31, 2022. However, there was a slight increase to 26.45 days by December 31, 2023, followed by a marginal increase to 27.66 days by December 31, 2024. Overall, the trend suggests that Marathon Petroleum Corp has been able to streamline its operations and optimize its cash flow cycle, leading to a shorter duration for converting raw materials into cash receipts.