Marathon Petroleum Corp (MPC)
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 | 1.59 | 1.67 | 1.84 | 1.90 | 1.76 | 1.66 | 1.49 | 1.45 | 1.70 | 2.02 | 1.98 | 1.89 | 1.81 | 1.84 | 1.27 | 1.16 | 1.80 | 1.25 | 1.24 | 1.20 |
| Quick ratio | 1.08 | 1.17 | 1.24 | 1.27 | 1.26 | 1.15 | 1.08 | 1.05 | 1.22 | 1.35 | 1.39 | 0.84 | 0.74 | 0.77 | 0.47 | 0.54 | 0.55 | 0.59 | 0.59 | 0.51 |
| Cash ratio | 0.51 | 0.60 | 0.66 | 0.67 | 0.59 | 0.52 | 0.47 | 0.42 | 0.61 | 0.78 | 0.88 | 0.38 | 0.37 | 0.43 | 0.09 | 0.12 | 0.09 | 0.10 | 0.08 | 0.06 |
The liquidity ratios of Marathon Petroleum Corp, as depicted in the table above, provide insights into the company's ability to meet its short-term obligations.
1. Current Ratio: Marathon Petroleum Corp's current ratio has been fluctuating over the past eight quarters, ranging from a low of 1.45 to a high of 1.90. Generally, the current ratio indicates the company's ability to pay off its current liabilities using its current assets. With values consistently above 1, the company has had an adequate level of current assets to cover its short-term liabilities.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, measures the company's ability to meet its short-term obligations using its most liquid assets. Marathon Petroleum Corp's quick ratio has shown some variability, ranging from 1.07 to 1.32. The ratios above 1 suggest that the company has sufficient liquid assets to cover its short-term liabilities without relying on inventory.
3. Cash Ratio: The cash ratio reflects Marathon Petroleum Corp's ability to cover its short-term liabilities using only its cash and cash equivalents. The company's cash ratio has varied between 0.45 and 0.71, indicating that its cash holdings may not be enough to cover its current liabilities fully. However, the ratios generally above 0.5 suggest that the company has a moderate level of cash reserves relative to its short-term obligations.
In conclusion, based on the liquidity ratios analyzed, Marathon Petroleum Corp appears to have maintained a relatively stable liquidity position over the past quarters. The company has generally demonstrated the ability to meet its short-term obligations using a combination of current assets, liquid assets, and cash reserves. Further monitoring of these ratios will be essential to ensure continued financial stability and the ability to navigate short-term liquidity challenges.
See also:
Marathon Petroleum Corp 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 | 25.56 | 14.82 | 14.73 | 14.64 | 12.61 | 11.93 | 10.63 | 12.73 | 15.49 | 22.92 | 27.04 | 29.89 | 28.88 | 23.06 | 22.54 | 14.86 | 18.68 | 16.40 | 17.52 | 20.99 |
The cash conversion cycle of Marathon Petroleum Corp has shown some variability over the past eight quarters. In Q4 2023, the company's cash conversion cycle increased to 15.78 days compared to the previous quarter. This indicates that it took Marathon Petroleum Corp 15.78 days on average to convert its investments in raw materials and operating expenses into cash from sales during the quarter.
While the cash conversion cycle increased in Q4 2023, it has generally been relatively stable around the 12 to 15-day range over the past two years. This suggests that Marathon Petroleum Corp has been efficient in managing its working capital and converting its inventory and accounts payable into cash.
It is noteworthy that the cash conversion cycle was lower in the second half of 2022 compared to the first half of the same year, indicating improved operational efficiency during that period. The company managed to reduce the time it takes to convert its investments into cash, which is a positive sign of effective working capital management.
Overall, Marathon Petroleum Corp's cash conversion cycle provides insights into the efficiency of its working capital management and ability to generate cash from its day-to-day operations. Tracking this metric over time can help assess the company's operational efficiency and financial health.