Nextera Energy Inc (NEE)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.55 | 0.51 | 0.53 | 0.47 | 0.53 |
| Quick ratio | 0.26 | 0.25 | 0.28 | 0.63 | 0.25 |
| Cash ratio | 0.10 | 0.06 | 0.04 | 0.44 | 0.04 |
NextEra Energy Inc's liquidity ratios have shown some fluctuation over the past five years. The current ratio, which measures the company's ability to cover short-term liabilities with short-term assets, has ranged from 0.47 to 0.55. A current ratio below 1 indicates that the company may have difficulty meeting its short-term obligations.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. NextEra Energy Inc's quick ratio has varied from 0.37 to 0.47 over the same period. This suggests that the company may face challenges in meeting its immediate liabilities without relying on inventory for liquidity.
The cash ratio, which is the most conservative liquidity ratio as it only includes cash and cash equivalents in the numerator, has ranged from 0.18 to 0.31 for NextEra Energy Inc. This indicates that the company may have limited liquid resources available to cover its short-term obligations and financial commitments.
Overall, NextEra Energy Inc's liquidity ratios suggest that the company may have faced some challenges in maintaining sufficient liquid assets relative to its current liabilities in recent years. It is important for the company to closely monitor and manage its liquidity position to ensure it can meet its financial obligations in a timely manner.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 77.86 | 90.49 | 91.90 | 98.80 | 68.26 |
Based on the data provided, the cash conversion cycle of NextEra Energy Inc has demonstrated a varied trend over the past five years. The company's cash conversion cycle has fluctuated significantly, ranging from -368.83 days in 2023 to -139.31 days in 2019.
The negative values indicate that NextEra Energy Inc has been able to efficiently convert its investments in inventory and accounts receivable into cash. This suggests that the company's operations are generating cash quickly, which is a positive indicator of financial health and efficiency.
The decreasing trend from 2019 to 2023 indicates an improvement in managing the cash conversion cycle, as the company has been able to further shorten the time it takes to convert its investments into cash. This can be attributed to effective inventory management and accounts receivable collection procedures.
Overall, the negative values of the cash conversion cycle for NextEra Energy Inc suggest that the company has been effective in managing its working capital and converting investments into cash efficiently over the past five years.