National Fuel Gas Company (NFG)

The liquidity ratios of National Fuel Gas Co. as depicted in the table have shown some fluctuations over recent quarters.

Firstly, the current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been ranging between 0.39 and 0.61. A current ratio greater than 1 indicates that a company has more current assets than current liabilities. National Fuel Gas Co.'s current ratio has been consistently below 1, suggesting that the company may be facing challenges in meeting its short-term obligations using its current assets alone.

Secondly, the quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. This ratio has been fluctuating between 0.26 and 0.54. A quick ratio of 1 or higher is generally considered healthy, indicating that the company can meet its short-term liabilities without relying on selling its inventory. National Fuel Gas Co.'s quick ratio has also been consistently below 1, further confirming potential liquidity concerns.

Lastly, the cash ratio, which is the most conservative liquidity ratio as it measures a company's ability to cover its current liabilities with cash and cash equivalents only, has ranged from 0.06 to 0.25. A higher cash ratio indicates a stronger liquidity position, with values closer to 1 indicating a company could cover all its current liabilities with its cash on hand. National Fuel Gas Co.'s cash ratio has been relatively low, suggesting a limited ability to cover short-term obligations with cash reserves alone.

Overall, the trend in National Fuel Gas Co.'s liquidity ratios indicates potential liquidity challenges, particularly with consistently low current, quick, and cash ratios. Investors and stakeholders may want to closely monitor the company's liquidity position to ensure it can meet its short-term financial obligations effectively.

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Additional liquidity measure

The cash conversion cycle of National Fuel Gas Co. has exhibited fluctuations over the past eight quarters, reflecting changes in the company's efficiency in managing its working capital. In Q1 2024, the company's cash conversion cycle was 11.00 days, indicating an increase in the amount of time it takes for the company to convert its investments in inventory and accounts receivable into cash.

The negative cash conversion cycle in Q4 2023 and Q4 2022 (-26.50 days and -32.23 days, respectively) suggests that during those quarters, the company was able to convert its investments into cash more quickly than the time it took to pay its suppliers. This can be a positive sign of efficient working capital management.

Q3 2023 and Q2 2022 also showed a relatively efficient cash conversion cycle at 9.53 days and 2.10 days, respectively, indicating that the company was able to optimize its working capital and efficiently convert its assets into cash flow.

On the other hand, Q1 2023 and Q2 2023 exhibited negative values (-12.34 days and -21.77 days, respectively), indicating that the company was taking longer to convert its investments into cash compared to the time it took to pay its suppliers. This may suggest potential inefficiencies in working capital management or challenges in the collection of receivables.

Overall, analyzing the cash conversion cycle provides insights into the company's efficiency in managing its working capital and converting assets into cash. fluctuations in this ratio may signal areas for improvement in inventory management, accounts receivable collection, and accounts payable turnover.