Murphy USA Inc (MUSA)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.79 | 0.95 | 0.85 | 1.14 | 1.18 |
| Quick ratio | 0.05 | 0.14 | 0.09 | 0.38 | 0.31 |
| Cash ratio | 0.05 | 0.14 | 0.09 | 0.38 | 0.31 |
Murphy USA Inc'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 1.18 in 2020 to 0.79 in 2024. This downward trend indicates a potential weakening liquidity position over the years.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Murphy USA Inc's quick ratio improved from 0.31 in 2020 to 0.14 in 2023 but then decreased to 0.05 in 2024. This suggests that the company may have had difficulty meeting its short-term obligations without relying on inventory in the most recent year.
The cash ratio, which measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, followed a similar pattern to the quick ratio. It increased from 0.31 in 2020 to 0.38 in 2021, but then declined to 0.05 in 2024. This indicates a potential decrease in the company's ability to pay its short-term obligations solely with its cash resources.
Overall, Murphy USA Inc's liquidity ratios paint a mixed picture, with a general trend of decreasing liquidity from 2020 to 2024. This may raise concerns regarding the company's ability to meet its short-term financial obligations efficiently in the coming years.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 8.17 | 122.72 | 5.53 | 6.88 | 10.37 |
The cash conversion cycle of Murphy USA Inc has shown fluctuations over the years based on the provided data. It decreased from 10.37 days in December 2020 to 5.53 days in December 2022, indicating an improvement in the efficiency of converting resources into cash. However, the cycle unexpectedly increased significantly to 122.72 days in December 2023, suggesting potential inefficiencies in managing cash flows, inventory, and receivables during that period. The cycle then decreased to 8.17 days by December 2024, but it remained higher than the levels observed in 2022. Overall, Murphy USA Inc should closely monitor and manage its cash conversion cycle to ensure optimal working capital management and operational efficiency.