Newmont Goldcorp Corp (NEM)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.25 | 2.23 | 2.90 | 2.52 | 2.63 |
| Quick ratio | 0.71 | 1.41 | 2.04 | 1.86 | 1.20 |
| Cash ratio | 0.50 | 1.28 | 1.91 | 1.73 | 1.04 |
Looking at Newmont Corp's liquidity ratios over the past five years, we can see a trend of declining liquidity levels. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has decreased from 2.63 in 2019 to 1.25 in 2023. This indicates that Newmont Corp may be less able to meet its short-term obligations using its current assets.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, also shows a downward trend from 1.78 in 2019 to 0.98 in 2023. This suggests that Newmont Corp's ability to meet immediate payment obligations without relying on inventory has weakened over the years.
Similarly, the cash ratio, which is the most stringent measure of liquidity as it only includes cash and cash equivalents, has decreased from 1.62 in 2019 to 0.77 in 2023. This indicates that Newmont Corp may have a lower level of cash on hand relative to its current liabilities.
Overall, the declining trend in Newmont Corp's liquidity ratios raises concerns about its short-term financial health and ability to meet its obligations. It may be worth monitoring the company's liquidity management strategies and cash flow position to ensure it maintains a healthy level of liquidity in the future.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 6.91 | -10.68 | -11.60 | -8.05 | -157.17 |
The cash conversion cycle for Newmont Corp has exhibited some fluctuations over the past five years. It increased significantly in 2023 to 76.22 days compared to 30.74 days in 2022. This sharp rise indicates a prolonged period for Newmont Corp to convert its investments in raw materials and other inputs into cash from sales.
The trend in the cash conversion cycle shows that Newmont Corp has been experiencing challenges in efficiently managing its working capital. A longer cash conversion cycle could lead to increased working capital requirements, potentially tying up resources and impacting the company's overall liquidity and profitability.
It is important for Newmont Corp to analyze the factors contributing to the elongated cash conversion cycle in 2023 and implement strategies to optimize working capital management. By focusing on improving inventory turnover, accounts receivable collection, and accounts payable management, Newmont Corp may be able to reduce its cash conversion cycle and enhance its overall financial performance.