Marathon Petroleum Corp (MPC)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.25 | 1.23 | 1.31 | 1.43 | 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 |
| Quick ratio | 0.25 | 0.24 | 0.35 | 0.35 | 0.51 | 0.60 | 0.66 | 0.67 | 0.59 | 0.52 | 0.47 | 0.42 | 0.61 | 0.78 | 0.88 | 0.39 | 0.38 | 0.43 | 0.09 | 0.12 |
| Cash ratio | 0.25 | 0.24 | 0.35 | 0.35 | 0.51 | 0.60 | 0.66 | 0.67 | 0.59 | 0.52 | 0.47 | 0.42 | 0.61 | 0.78 | 0.88 | 0.39 | 0.38 | 0.43 | 0.09 | 0.12 |
The current ratio of Marathon Petroleum Corp has shown fluctuating trend over the analyzed period, starting at 1.16 in March 2020, peaking at 2.02 in September 2021, before declining to 1.23 by September 30, 2024. This ratio indicates the company's ability to cover its short-term liabilities with its current assets. The gradual decrease in the current ratio from 2021 to 2024 may suggest potential liquidity challenges for the company in meeting its short-term obligations.
The quick ratio, also known as the acid-test ratio, has displayed a similar pattern to the current ratio, with fluctuations over time. The quick ratio was lowest at 0.09 in June 2020, peaking at 0.88 in June 2021, and then decreasing to 0.24 by September 30, 2024. This metric provides a more stringent measure of liquidity as it excludes inventory from current assets. The varying quick ratio trend implies fluctuating levels of liquidity and ability to cover short-term obligations without relying on selling inventory.
The cash ratio, which is the most stringent liquidity ratio, also exhibits a similar trend as the quick ratio. Starting at 0.12 in March 2020, this ratio peaked at 0.88 in June 2021 before decreasing to 0.25 by December 31, 2024. The cash ratio signifies the company's ability to pay off its current liabilities using only cash and cash equivalents. The declining trend in the cash ratio indicates potential challenges in maintaining adequate cash reserves to cover immediate liabilities.
Overall, the liquidity ratios of Marathon Petroleum Corp have shown variability over the analyzed period, with some fluctuations indicating potential liquidity risks. It is important for investors and stakeholders to monitor these ratios closely to assess the company's short-term financial health and ability to meet its obligations.
See also:
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 27.29 | 27.60 | 26.59 | 27.00 | 25.78 | 28.01 | 25.62 | 25.41 | 21.13 | 23.76 | 28.59 | 27.91 | 26.73 | 35.82 | 40.29 | 48.48 | 44.42 | 36.37 | 35.77 | 28.07 |
The cash conversion cycle of Marathon Petroleum Corp has exhibited fluctuations over the period from March 31, 2020, to December 31, 2024.
The company's cash conversion cycle measures the time it takes for Marathon Petroleum Corp to convert its investments in raw materials and other production expenses into cash received from sales. A shorter cash conversion cycle indicates that the company is able to quickly convert its investments into cash, thus improving liquidity and potentially reducing the need for external financing.
From March 31, 2020, to December 31, 2024, the cash conversion cycle for Marathon Petroleum Corp ranged from a high of 48.48 days on March 31, 2021, to a low of 21.13 days on December 31, 2022. A higher number of days implies a longer duration for the company to generate cash from its operations, which could indicate inefficiencies in managing inventory, receivables, or payables.
Overall, Marathon Petroleum Corp's cash conversion cycle showed some volatility, with periods of both increases and decreases. A decreasing trend in the cash conversion cycle can be interpreted positively as it indicates improved efficiency in managing working capital. However, it is essential for the company to continually monitor and optimize its cash conversion cycle to ensure efficient use of resources and maintain a healthy liquidity position.