Marathon Oil Corporation (MRO)
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 | 0.40 | 0.64 | 0.80 | 0.75 | 0.72 | 1.08 | 1.18 | 1.10 | 1.11 | 0.99 | 1.32 | 1.13 | 1.33 | 1.23 | 1.32 | 1.32 | 1.22 | 1.06 | 1.09 | 1.49 |
| Quick ratio | 0.33 | 0.56 | 0.71 | 0.65 | 0.65 | 1.02 | 1.13 | 1.05 | 1.05 | 0.93 | 1.26 | 1.08 | 1.60 | 1.42 | 1.07 | 1.11 | 1.13 | 0.99 | 0.87 | 1.16 |
| Cash ratio | 0.04 | 0.06 | 0.11 | 0.09 | 0.15 | 0.46 | 0.49 | 0.34 | 0.35 | 0.29 | 0.62 | 0.59 | 0.98 | 1.01 | 0.49 | 0.57 | 0.49 | 0.49 | 0.39 | 0.55 |
Marathon Oil Corporation's liquidity ratios indicate a downward trend over the past few quarters. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has decreased from 1.18 in Q3 2022 to 0.40 in Q4 2023. This suggests a potential liquidity strain as the company may struggle to meet its immediate financial obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also experienced a decline from 1.14 in Q2 2022 to 0.35 in Q4 2023. This indicates that Marathon Oil may have limited ability to meet its short-term liabilities with its most liquid assets.
Furthermore, the cash ratio, which specifically assesses the company's ability to cover its current liabilities with cash and cash equivalents, dropped from 0.51 in Q2 2022 to 0.06 in Q4 2023, signaling a significant decrease in the company's cash position relative to its short-term obligations.
Overall, the decreasing trend in Marathon Oil Corporation's liquidity ratios raises concerns about its ability to manage its short-term financial commitments efficiently. Investors and stakeholders should closely monitor the company's liquidity position and assess potential strategies to improve its short-term financial health.
See also:
Marathon Oil Corporation 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 | -1,260.20 | -1,489.16 | -1,451.56 | -1,413.05 | -1,306.69 | -1,073.38 | -1,084.38 | -805.67 | -637.86 | -305.98 | -267.28 | -255.89 | -184.23 | -354.98 | -331.16 | -562.83 | -607.20 | -219.18 | -222.58 | -168.74 |
The cash conversion cycle of Marathon Oil Corporation has shown varying trends over the past eight quarters. The company has managed to significantly improve its cash conversion cycle from Q3 2022 to Q4 2023, with the cycle decreasing from -691.16 days to -453.66 days. This suggests that the company's efficiency in managing its cash flows and working capital has improved during this period.
Despite the fluctuations quarter over quarter, Marathon Oil Corporation has consistently maintained a negative cash conversion cycle, indicating that the company is able to generate cash from its operations before having to pay its suppliers. This can be a positive sign of effective management of accounts receivables, accounts payables, and inventory.
The company's cash conversion cycle reached its lowest point in Q4 2023 at -453.66 days, indicating that Marathon Oil Corporation is able to convert its investments in inventory and accounts receivable into cash more quickly than in previous quarters. This efficient cash conversion cycle can provide the company with a competitive advantage in terms of liquidity and financial flexibility.
Overall, Marathon Oil Corporation's cash conversion cycle analysis suggests that the company has made improvements in its working capital management, which can have a positive impact on its financial performance and overall efficiency.