One Gas Inc (OGS)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.52 | 1.02 | 2.27 | 0.68 | 0.58 |
| Quick ratio | 0.25 | 0.47 | 0.36 | 0.38 | 0.31 |
| Cash ratio | 0.01 | 0.01 | 0.01 | 0.01 | 0.02 |
The liquidity ratios of ONE Gas Inc show fluctuations over the past five years.
The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, decreased significantly from 2.27 in 2021 to 0.52 in 2023. This indicates a potential strain on the company's liquidity in the most recent year.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also saw a decline from 2.03 in 2021 to 0.32 in 2023. This suggests that the company may have difficulty meeting its short-term obligations without relying on inventory.
Furthermore, the cash ratio, which indicates the proportion of current liabilities that can be covered by cash and cash equivalents, dropped from 1.68 in 2021 to 0.09 in 2023. This sharp decrease raises concerns about the company's ability to pay off its current obligations with its available cash resources.
Overall, the declining trend in all three liquidity ratios suggests that ONE Gas Inc may be facing challenges in maintaining sufficient liquidity to meet its short-term financial obligations. It would be prudent for the company to closely monitor its liquidity position and take necessary steps to improve its short-term financial health.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 25.38 | 55.90 | -2,033.32 | -1,766.67 | -1,105.28 |
The cash conversion cycle for ONE Gas Inc has shown fluctuating trends over the past five years. In 2023, the company's cash conversion cycle improved significantly to 49.25 days compared to 73.31 days in 2022. This indicates that the company was able to convert its investments in inventory and accounts receivable into cash more efficiently during the most recent year.
Looking back at previous years, there was a notable increase in the cash conversion cycle in 2019 to 78.38 days, which decreased steadily until 2023. This implies that the company has been managing its working capital more effectively and enhancing its liquidity position.
Overall, the downward trend in the cash conversion cycle suggests that ONE Gas Inc has been successful in optimizing its operations, reducing the time it takes to convert resources into cash, and potentially improving its overall financial performance and cash flow management.