ONEOK Inc (OKE)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.90 | 0.84 | 0.75 | 1.39 | 0.73 |
| Quick ratio | 0.59 | 0.57 | 0.50 | 1.61 | 0.42 |
| Cash ratio | 0.10 | 0.07 | 0.05 | 0.99 | 0.01 |
Oneok Inc.'s liquidity ratios have fluctuated over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with current assets, was highest in 2020 at 1.39 and lowest in 2021 at 0.75. This ratio has shown some variability but generally indicates that the company may have had some challenges in meeting its short-term obligations with its current assets.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also varied over the years. It peaked in 2020 at 1.11 and hit a low of 0.48 in 2019. The decreasing trend in recent years suggests that Oneok Inc. may have had difficulties in quickly covering its short-term liabilities without relying on inventory.
The cash ratio, which indicates the company's ability to cover its current liabilities with cash and cash equivalents, has shown significant fluctuations. The ratio was highest in 2020 at 0.50 and lowest in 2019 at 0.06. The declining trend in the cash ratio may raise concerns about Oneok Inc.'s ability to meet its immediate obligations with readily available cash resources.
Overall, the liquidity ratios of Oneok Inc. demonstrate a mixed performance over the past five years, with some years showing stronger liquidity positions than others. It is essential for investors and stakeholders to closely monitor these ratios to assess the company's ability to meet its short-term financial obligations effectively.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 8.72 | 6.09 | 4.88 | 0.35 | -18.67 |
The cash conversion cycle (CCC) of Oneok Inc. has shown fluctuations over the past five years.
In 2019, the company had a negative CCC of -7.82 days, indicating that it was able to receive payment for its inventory before needing to pay its suppliers, a favorable position from a cash flow perspective.
By 2020, the CCC increased to 10.58 days, showing that the company took longer to convert its investments in inventory back into cash. This increase in the CCC could be a result of changes in payment terms with suppliers or changes in inventory management practices.
In 2021, the CCC further improved to -3.30 days, indicating a return to a more efficient cash conversion cycle compared to the previous year. However, the negative CCC may also suggest aggressive inventory management or overly lenient payment terms with suppliers.
In 2022, there was a significant improvement in the CCC to 0.31 days, signaling a more balanced approach to managing cash conversion activities. This improvement may have been driven by better inventory control or more efficient accounts receivable management.
In 2023, the CCC increased to 11.43 days, indicating that Oneok Inc. took longer to convert its investments in inventory and accounts receivable into cash compared to the previous year. This increase may be a potential concern as it suggests a slowdown in the company's cash conversion efficiency.
Overall, fluctuations in the CCC of Oneok Inc. over the past five years suggest varying levels of efficiency in managing working capital and cash flows. Monitoring and analyzing the CCC can help identify areas for improvement in inventory management, accounts receivable collection, and payment terms with suppliers.