ONEOK Inc (OKE)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.90 | 0.90 | 0.84 | 0.75 | 1.39 |
| Quick ratio | 0.65 | 0.59 | 0.57 | 0.50 | 1.61 |
| Cash ratio | 0.16 | 0.10 | 0.07 | 0.05 | 0.99 |
ONEOK Inc's liquidity ratios show a trend of decreasing liquidity over the years.
1. Current Ratio: The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, decreased from 1.39 in 2020 to 0.90 in 2024. This indicates that the company may be facing challenges in meeting its short-term obligations.
2. Quick Ratio: The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also decreased from 1.61 in 2020 to 0.65 in 2024. This suggests that the company's ability to pay off immediate liabilities without relying on inventory has declined.
3. Cash Ratio: The cash ratio, which focuses solely on the company's ability to cover its short-term liabilities with cash and cash equivalents, decreased significantly from 0.99 in 2020 to 0.16 in 2024. This indicates a notable reduction in the company's ability to settle its immediate obligations with readily available cash.
Overall, the decreasing trend in these liquidity ratios signals a potential liquidity risk for ONEOK Inc, as its ability to meet short-term obligations has weakened over the years. It would be crucial for the company to closely monitor and address its liquidity position to ensure financial stability and operational continuity.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -0.74 | 8.72 | 6.09 | 4.88 | 0.35 |
The cash conversion cycle of ONEOK Inc has experienced fluctuations over the years. In December 2020, the company's cash conversion cycle was relatively short at 0.35 days, indicating efficient management of cash flow. However, by December 2024, the cash conversion cycle has turned negative at -0.74 days, which could suggest an aggressive approach to managing cash flow where payments are received before obligations are due.
The trend shows an increase in the cash conversion cycle from 2020 to 2024, with the cycle reaching its peak at 8.72 days by December 2023. This elongation in the cash conversion cycle may indicate potential challenges in managing working capital efficiently or delays in converting inventory to cash.
It is worth noting that the cash conversion cycle is a key indicator of a company's liquidity and operational efficiency. A longer cash conversion cycle may tie up funds and lead to a strain on liquidity, while a shorter cycle indicates a faster turnover of cash and more efficient operations. ONEOK Inc should monitor its cash conversion cycle closely to ensure optimal management of cash flow and working capital in the future.